The spiraling energy crisis prompted by Russia's invasion of Ukraine provides further evidence that energy is as much a geopolitical issue as it is an environmental and economic one.
Many countries have banned Russian energy imports, squeezing available supply and exacerbating volatility in oil and natural gas markets, resulting in higher costs on customers' energy bills.
It has also put energy security front and center of the public energy debate. At least in the developed world, a place typically occupied by environmental and climate concerns.
The response from policymakers has been either to call for the production of more traditional energy resources or to accelerate the transition to electrifying everything. There's probably a reasonable middle ground between those two positions, but it's anyone's guess whether policymakers can find it.
The situation further incentivizes consumers to generate their energy at home by installing rooftop solar panels and battery storage, smart meters, and other advanced energy technologies that allow them to reduce their dependency on the grid.
As a result, the growth rate of clean energy technologies such as electric vehicles, heat pumps, electric appliances, energy storage systems, and smart thermostats should accelerate.
The emergence of a more decentralized electricity grid creates opportunities for consumers to protect themselves from outages and price spikes and for building microgrids connecting multiple homes and whole neighborhoods run on clean energy. With the adoption of the right technology, microgrids and individual rooftop solar resources can reduce the strain on the grid and be a source of distributed generation during periods of peak demand.
There's more than one way to make the grid more reliable. Some regulators may balk at the added complication of managing multiple dispatchable generation sources, as compared to firing up a single fossil-based backup powerplant, but managing the flow of electricity from many dispatchable sources in real-time to match fluctuations in demand is the future. And it's a future that takes advantage of consumer preferences for clean energy and advanced technologies. If done correctly, it should also deliver lower energy bills, cleaner skies, and a more flexible – and therefore resilient – electricity system.
A February report by Environment America looked at how maximizing the potential of rooftop solar could increase the reliability of the overall grid to withstand crises like the 2021 Texas power outage.
"Rooftop solar provides unique benefits to the electric grid that can be especially helpful in the face of extreme weather events. By generating electricity right where it’s needed, small-scale solar reduces demand for electricity from the power grid, thereby reducing the need for centralized power plants and transmission. Those benefits help reduce the costs and improve the reliability of our power system all year, but are especially helpful for resilience during times of high grid stress," according to the Environment America report.
But for consumers to participate in the energy transition, they must have a voice. Only a handful of states currently give consumers the ability to choose their energy supply, and net metering programs, which incentivize consumers to install rooftop solar, are under attack in California and other jurisdictions by powerful incumbent utilities.
Policymakers and regulators at the state and federal levels must redouble efforts to reduce barriers to entry for private sector investment and innovation to achieve the power grid of tomorrow. There's no better time than now to do so, as outdated power plants come up for replacement and we look to overhaul national transmission infrastructure.
A more decentralized electricity system can also help meet the growing demand for electricity because of the return of economic activity put on hold for the past two years due to the pandemic. Meeting that new demand will require more transmission lines, more distributed generation, more energy storage, continued energy efficiency and management advances, and successfully implementing FERC order 2222 and similar policies designed to integrate more distributed energy in the grid.
Even fully decarbonizing the energy sector and the broader economy will not solve all the geopolitical problems associated with energy supply. Indeed, it will likely shift the balance of power from petrostates to companies with mineral resources crucial to manufacturing clean energy technologies such as solar panels, batteries, and wind turbines. But a more decentralized electricity system can help us avoid shortfalls in electricity supply that leaves millions in the dark.