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Energy sector teams up to address challenges of technological disruption and transformation

October 09, 2018  |  Article
Peter Gregg, Chair of Energy Transformation Network of Ontario

The multi-sectoral industry group tasked with helping shape the energy sector of tomorrow through policy and regulatory recommendations announced in May that it would be known as the Energy Transformation Network of Ontario (ETNO) instead of by its former name, the Ontario Smart Grid Forum.  

Peter Gregg, the President and CEO of the IESO, is the ETNO’s Chair. Together with industry leaders representing distributors, transmitters, energy consumers, public sector institutions, academic bodies, non-profit organizations, and an arms-length corporate partners committee, Gregg is leading a timely and much-needed industry conversation with some of the best minds out there about the future of Ontario’s smart grid.  

In the following interview, Peter explains how the new ETNO name more accurately reflects the current state of Ontario’s energy sector, how innovation is enabling competition in the sector, how competition is reshaping the electricity market, and what the benefits are for Ontario’s electricity consumers.

Why is the new ETNO name important?

Change is coming at us from all sides – not just within the sector but from outside as well – and the impact on the industry, its potential future structure, and on consumers, is huge. Consumers are front and centre in this new paradigm. With advanced technology, and all the data it can deliver, we anticipate consumers will benefit not only in terms of the cost of electricity, but also in terms of choice and convenience. The new ETNO name more accurately reflects the significant transformation that’s currently underway in Ontario’s energy sector. As a group, we felt it was important to capture the scope of that change by highlighting its transformative aspect.

What are some of the issues the ETNO will be discussing?

Distributed energy resources (DERs) are a key area of focus. DERs are electricity-producing resources or controllable loads that are directly connected to a local distribution system or connected to a host facility within the local distribution system. These resources are an area of focus because they are increasing in number, changing the dynamic between the local distribution grids and the province-wide transmission grid. To be expected, there are technical, commercial and regulatory challenges that come with this type of integration.

A controllable load is a device, or connected series of devices, such as an HVAC system or electric water heater, that can increase or decrease electricity consumption by command.

We’re also talking about advanced distribution management platforms, which is essentially software that enables the management and optimization of these resources. These platforms might help facilitate more sophisticated markets for DER-related services someday. Value-added services such as energy storage and electric vehicle charging, and the regulatory rules of engagement to protect consumers and give them more choice and control are also high on our list. 

Value-added services are typically energy services beyond basic electricity supply that provide additional benefits, such as operational or financial.

Will the ETNO be advocating for specific outcomes as a result of these discussions?

Our primary purpose is to provide advice to government, regulators, agencies and industry about how to build out and implement a smart grid in Ontario that allows for all these changes. We prefer to find consensus on potentially controversial topics. ETNO is a forum that allows industry representatives to air their opinions and get issues on the table before formulating any policy recommendations. Even where we can’t always agree on the specific solution, ETNO is an invaluable resource to identify major issue areas before they arise in the regulatory arena. 

The ETNO is a forum that allows industry representatives to air their opinions and get issues on the table before formulating any policy recommendations.

Peter Gregg, IESO President and CEO, Chair of ETNO

Will the ETNO be discussing which grid services should be provided by regulated utilities and which should be offered by competitive service providers?

Yes, very likely we will, and many argue that this is not necessarily a mutually exclusive choice. This is an important question for the energy sector generally, not just here in Ontario but in many jurisdictions in North America. It was raised at the IESO’s Electricity Summit this year and also in a follow-up survey of Summit participants. A majority of respondents agreed that regulated utilities should be allowed to directly compete with third-party providers of new value-added services, and that competition should be regulated and fair. This is a good example of what the ETNO will be talking about. Certain types of technology-driven, value-added services weren’t on our collective radar screens 20 years ago, but now decisions need to be made about how these services are offered, how they’ll be priced, and how consumers will be protected.

Do you believe innovation spurs competition, and will the ETNO provide advice about reshaping the electricity market to make it more conducive to competition?

Innovation is both a sign of a competitive marketplace as well as a contributing factor to competition itself. Competition and innovation both require fair market access, open interoperability standards, and consumer access to their own energy data. This has been a longstanding policy position of the ETNO over the past decade.I believe innovation creates opportunities and enables change. It can introduce more competition and drive market costs down. For example, the IESO is working right now on the redesign of Ontario’s wholesale electricity market in our Market Renewal Program and our studies show that there are between $2.2-$5.2 billion in cost savings to be realized over a 10-year period. A lot of that will come through innovation and competition. I think all ETNO members are of one mind on the importance of innovation and its relationship with competitive markets.

The Ontario Energy Board has a mandate to ensure the long-term security and viability of Ontario’s energy system and to protect energy consumers. Will the ETNO be consulting with the Ontario Energy Board on its recommendations?

Yes, a representative from the Ontario Energy Board is a member and participates as an observer. The ETNO’s goal is to help shape new policy by offering advice and recommendations to a broad range of decision-makers, including the Ontario Energy Board. Regulatory changes will be critical to stimulating innovation, enabling greater competition and driving down costs.

See the list of current ETNO members together with their detailed bios.