28
Feb

Microsoft’s Brian Janous Previews His Session on the Effects of Federal Policy

Brian Janous, Director of Energy Strategy, Microsoft, will moderate the session How Evolving Federal Policy Is Impacting Energy Markets on Day 2.

We asked Brian about his session.

Q. Why is federal policy regarding energy markets changing and how?

A. New energy technology, namely renewables and storage, will continue to have a major impact on the design of wholesale markets. More so than in any time in the history of the electric grid, a technology with an incredibly disruptive characteristic (zero variable cost energy) is being injected into the market at scale. Renewables are doing to the market was people speculated nuclear would do, that is that it would become so cheap to meter that you wouldn’t even bother. Now it remains to be seen how inexpensive renewables can truly be. But there’s no debating that at a near zero variable cost to operate, the current wholesale market design that is predicated on a variable cost to operate, is completely undermined by zero variable cost assets.

Q. What will this mean to the average conference attendee and his or her company? How it will affect the life of the average corporate energy manager?

A. Talking about wholesale energy markets and the accompanying jargon can seem pretty bland. But it’s the wholesale power markets that ultimately dictate what gets built, what gets retired, and ultimately what a consumer pays for electricity in the long run. We need functioning markets to ensure that the least-cost, most efficient technologies are able to come to market and ultimately displace older, less efficient generation units.

Q. Are the impending changes we’re talking about going to be subtle or dramatic?

A. We’re at a point in history of the electricity grid where the technological innovations that are being introduced today are as disruptive as any time in history. Every technological innovation in the energy sector up until now has been incremental. What we’re facing today is transformational changes. Not just from low cost renewables and storage, but also from how data will drive changes in how we understand and optimize energy flows across the grid.

Q. What impact, if any, will tax cuts have on the energy market?

A. I expect any changes to the tax rates to be temporary and ultimately will be overwhelmed by continued cost reductions in renewables and storage.

Q. What is the one thing you hope people will come away from the session with?

A. I would hope people better understand the importance of the underlying regulations that dictate the ultimate cost of energy to the consumer. As markets continue to evolve, issues that were at one point merely academic, become essential to understand if you are going to effectively manage energy costs for an organization.

Q. Why do you think people should attend this conference?

A. In this period of rapidly evolving technology and regulations, we have to continue to challenge and evolve or thinking so that we can prepare for the world as it will be, not as it was. It’s an exciting time to be part of this industry.

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