Distributed energy platforms: Who will lead the next electricity revolution?
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Gentil-kgencan-SFMBA-Sloan-2021-thesis.pdf
Description
Thesis PDF
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626.76 KB
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generic disclaimer sheets.pdf
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Supplementary file
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67.79 KB
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Author(s)
Gentil-Cantin, Kevin M.
Advisor(s)
Sastry, Anjali
Date Issued
June 2021
Publisher
Massachusetts Institute of Technology
Abstract
Climate change is forcing rapid change in the energy landscape. Two opposing paths represent plausible futures for the US power sector: centralization vs. distribution. Without trying to predict its likelihood, this thesis explores the implications of one of these paths, a distributed energy future. My objective is to investigate who could become the leader of this revolutionized industry. I specifically explore the potential role of three types of actors: privately-owned Utilities, energy-software Startups, and Large Tech companies, whom many do not yet factor into their assessment despite what I consider to be their vast scope to shape outcomes.
A literature review establishes the broad contours of a distributed energy future. I find that existing scenarios predict a more complex energy system and that intermittency would become a significant issue. I consider the role of distributed energy resources (DER) as a viable solution if built on digital platforms. To draw out the implications of these observations, I conducted nine in-depth interviews with executives. The analysis yielded four key insights: a distributed system would be a revolution for the industry; Utilities are under much pressure, putting their leading position at risk; Startups are in a position of dependency and cannot take the lead alone; Large Tech are much closer to playing an active role than it looks at first glance.
I sketch out comparisons with recent history to suggest that Large Tech companies should be considered as serious contenders for the leading role of a decentralized energy industry. I extend my analysis to the unique case of Tesla, also in a position of strength in this plausible future. I conclude this thesis by estimating that the answer depends on how utilities will act in this future, either by transforming themselves fast enough or letting Large Tech companies take over.
MIT Department
Sloan School of Management
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