Today, President Obama announced the final version of his landmark Clean Power Plan — America’s first-ever carbon standard for power plants. At a high level, it looks a lot like the draft that circulated last summer. Overall, utilities will aim to cut carbon pollution 32 percent by 2030, relative to 2005 levels. Each state will have its own targets and a long menu of options to meet them, including energy efficiency and renewables. State plans are due to the Environmental Protection Agency in 2018, and actual emissions cuts will begin by 2022. (Utilities that beat those timelines will be rewarded for doing so.)
There’s one thing that everyone agrees on: the Clean Power Plan will speed up the pace of change in the utility industry
Of course, as is true of any change, there’s a broad spectrum of opinions about the Clean Power Plan. Some states and utilities are ready to embrace it as a mechanism that rewards clean energy investment. Others are preparing to push back, arguing that the rule could push energy prices higher. But there’s at least one thing that everyone agrees about: the Clean Power Plan will speed up the pace of change in the utility industry. It will prioritize innovation, and encourage energy providers to keep exploring new ways to harness emerging technologies. We think that’s a good thing — and not just because Opower is a software company. Over the past 10 years, we’ve all seen how innovative technologies can empower utilities and their customers to achieve remarkable things, from saving energy, to lowering costs, to building a stronger power grid.
For example: it used to be that people didn’t have enough information to understand, much less choose, how much energy they use. A flood of new energy data and analytics changed that. Our clients alone have knocked $1 billion off their customers’ bills. With software alone, they’ve given 50 million people the tools and insights they need to save 8 billion kilowatt-hours of energy, and prevent 6 million tons of carbon dioxide from entering our atmosphere. It used to be that people didn’t have a reason to adopt dynamic rates, or help their power companies lower peak demand. Now they do. Utilities from Baltimore to Los Angeles are using software to engage millions of people in demand response. They’re cutting peak load by more than five percent on the hottest days of the year, and moving us toward a world where we can retire some of America’s most inefficient, most polluting power plants. It used to be that people couldn’t choose how they power their homes. But now, affordable energy storage and solar panels — whether residential, community, or utility-scale — are finally starting to give customers more control over where their energy comes from. And forward-looking utilities are positioning themselves as the providers of choice for those services.
The larger trend is that technology is opening up new ways for people to produce and consume energy. It’s also giving utilities the chance to reimagine their business models. In a world where energy demand is flattening and energy regulations are changing fast, utilities are using technology to shift from selling a commodity — electrons — to a wider set of energy services — including efficiency, solar, and storage. That’s good for homes and businesses, and it’s good for their utilities' bottom lines. And today, it’s why we believe the Clean Power Plan is an important step toward accelerating energy innovation in America. We look forward to helping utilities across the U.S. implement their own CPP strategies in the years ahead.