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Electricity Innovation Lab: transforming the U.S. electricity sector

Reos Partners
April, 2015



The Electricity Innovation Lab, or eLab, is a group of thought leaders and decision makers from across the U.S. electricity sector who are working together to speed the development of a distributed (decentralized), renewable grid. Such a system is more efficient, more resilient, and less taxing to the environment.

This multi-year Social Lab has created a critical structure for engagement and innovation across traditional institutional boundaries. It enables team members to regularly share learnings, best practices, and analysis results; collaborate around key issues or needs; and conduct deep dives into research and analysis findings. It has spawned four projects through which participants are continually exploring complex issues in-depth, developing coherent insights and recommendations, and partnering with other stakeholders to test and apply new ideas.

“I’ve been working on these issues for about 40 years,” says Amory Lovins, chairman and chief scientist of the Rocky Mountain Institute, “and this is the first time, I think, that such a broad spectrum of thought leaders in the electricity industry has ever been together in one place . . . I think it’s going to speed up the transition by maybe a decade.”


eLab is convened by Rocky Mountain Institute (RMI) and supported by Reos Partners. RMI is an independent, nonprofit think-and-do tank whose mission is to drive the efficient and restorative use of resources.


The growing need for reinvestment in the electricity infrastructure, climate change and other environmental concerns, an increasing focus on grid resilience, the changing costs of technologies, and the rapid development of new business solutions are fundamentally altering the electricity landscape in the United States. But innovation, change, cooperation, and conflict have been occurring in a disjointed way, at the “seams” in the electricity sector.

Among the questions in play:

  • How can we understand and effectively communicate the real costs and benefits of distributed resources as part of the electricity system?
  • How can we harmonize regulatory frameworks, pricing structures, and business models of utilities and distributed resource developers to enable varied solutions that yield the greatest benefit to customers and society as a whole?
  • How can we accelerate the pace of economic distributed resource adoption?


eLab has spawned four ongoing projects:

Shared Vision

The lack of a shared vision among electricity industry players slows progress and sometimes drives them to work at cross-purposes. A unifying sense of purpose, and greater stakeholder engagement around it, is key to transforming the electricity system. The Shared Vision project’s goal, then, is to help participants develop a common sense of purpose, align project efforts for greatest effect, and ultimately inform and engage others.


This project addresses two needs: insufficient ability to make relative valuations between investments in centralized and distributed resources, and insufficient knowledge and tools for understanding the costs and values of distributed resources. Phase 1 identified knowns and unknowns around the categorization of costs and values, methodological best practices, and gaps in understanding and approach. In the ongoing Phase 2, the project team is developing a framework for the language and concepts industry stakeholders use to describe the costs and values of distributed energy resources. It is also working to fill gaps in the modeling used to assess the costs and values of distributed resources.

New Business Models

The increasing role of distributed energy resources in the electricity system is shifting in the industry’s business model. New utility business models will need to provide versatile and flexible platforms that harmonize the interests of electricity providers, customers, and distributed resource developers at the distribution edge. The project team is framing clear objectives and principles that reflect the variety of perspectives on this topic, and it is taking the first step toward identifying viable new models.

Innovation Beacon

This project is designed to help meet the urgent need for innovation in the electricity sector. Innovation Beacon conducts design charrettes for microgrids, other aggregations of distributed resources, and relevant economic and deployment issues at the distribution edge. It also develops case studies of ongoing projects innovating around these issues.


“Accelerating the innovation toward a different future really is a multi-stakeholder dialogue and a process, to come up with creative business-level solutions about viable business models . . . and embracing the diversity of resources that we have at our fingertips that we really didn’t have many decades ago when we first developed the power system.”

Doug Arent, executive director, Joint Institute for Strategic Energy Analysis, National Renewable Energy Laboratory

“We want to also be part of the solution. We want to show and lead as an example of how renewables can be part of the supply for energy and as well how technology can really drive efficiencies.”

TJ DiCaprio, senior director of carbon and energy, Microsoft

“We’re changing the way energy is produced, the way it’s consumed, the way that consumers can control their electricity consumption, and there’s a lot of technologies emerging in the marketplace. It’s very important for all aspects of the industry to get together to think about what we have to do to reform the industry structure to accommodate all those emerging markets.”

Tom Brill, director of strategic analysis, planning, and pricing, San Diego Gas and Electric

“The utility business model is clearly and fundamentally broken. . . . Change will require a consensus among regulated utilities, the principal constituencies with whom they work, and their regulators. The composition of the lab is well suited to begin the critical negotiations that will ultimately determine whether these changes are possible.”

Ralph Cavanaugh, co-director, energy and transportation program, Natural Resources Defense Council

"A diverse, dispersed, resilient, largely renewable electricity future is the key to making the world richer, fairer, cooler, and safer. . . . I’ve been working on these issues for about 40 years, and this is the first time, I think, that such a broad spectrum of thought leaders in the electricity industry has ever been together in one place . . . I think it’s going to speed up the transition by maybe a decade."

Amory Lovins, chairman and chief scientist, Rocky Mountain Institute

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