YESS keynote: Here’s how we get to the energy system of tomorrow

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Richard Kauffman, New York State's energy czar, told his fellow alumni that there is currently no incentive for utility companies to innovate. (Photo by Michael Marsland)

The energy-efficient, flexible power grid of tomorrow is available today, but it will require a complete rethinking of America’s regulatory policies, New York State’s energy czar told a gathering of alumni, faculty, students, and experts at the Yale Environmental Sustainability Summit (YESS) on Nov. 6.

“Currently, there is no incentive for utility companies to innovate,” said Richard Kauffman, who delivered the summit’s introductory keynote address in Zhang Auditorium of Yale School of Management’s Evans Hall. “We can’t be surprised, then, that this is a system (Thomas) Edison would recognize.”

It is a century-old system dominated by big power plants, pushing out energy to customers who sometimes live hundreds of miles away, Kauffman said. The system is designed to handle peak usage — such as the hottest days of the year — but customers pay for the full system year-round. Worse still, roughly half of the raw energy is lost during the process.

What is needed, he proposed, is a more customer-driven system that features localized networks of sustainable energy programs, which then use the existing energy grid as a platform. Kauffman said it would benefit all parties involved, from the utility companies to the individual power users.“We are trying in New York to bring this scenario to reality,” Kauffman said. “It is pro-growth, pro-consumer, pro-innovation, and pro-environment.”

Kauffman oversees an array of regulatory and administrative departments in New York State, including the New York Power Authority, the Department of Public Service, the Long Island Power Authority, and the New York State Energy Research and Development Authority. He also leads New York’s Reforming the Energy Vision initiative, a plan for regulatory reforms, commitments to local renewable energy, creation of the Clean Energy Fund, the NY Green Bank, and a $1 billion NY-Sun solar program.

Kauffman also is the former senior adviser to the U.S. secretary of energy and a current member of the Council on Foreign Relations. His corporate resume includes positions with Goldman Sachs, Morgan Stanley, and Levi Strauss & Co. He is co-chair of the Yale Center for Business and the Environment Advisory Board and holds a master’s degree in international relations from Yale and a master’s in public and private management from the Yale School of Management.

In his YESS speech, Kauffman said the best approach to overhauling energy policy is to start with the consumer and work backward. It would mean aggregating the energy generated by solar panels on hundreds, even thousands, of school buildings, for example. It also would mean helping the public take advantage of the cost benefits of improved appliances, lighting systems, and other energy-efficient technologies.

Kauffman said localized, third-party energy networks would provide more resilience during weather emergencies, as well.“

We have a chance to have a more efficient energy system, an energy system that is more receptive to us,” Kauffman said.

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