242 PART II Implications and Industry/Regulatory Response

TABLE 1 The Electricity System of Today and that of the Future

Key Electricity
System
Features Today In the Future
System structure Radial distribution systems;
strong transmission system Highly meshed distribution
systems; modest transmission
system
Responsibility
control/ Primarily RTO duty Duty shared by RTO and EDU
balancing/
reliability
Source of
generation Large-scale, centralized facilities DG, large-scale remote
renewables
Load
participation Passive, consumers of electricity Active participants in
maintaining the supply-
demand balance
Role of energy
storage Limited role, mostly pumped Major role in balancing output
hydro from variable and intermittent
DG and providing ancillary
services
Flow of power
Unidirectional, transmission Bidirectional, lower in
across the
system to distribution system, magnitude, higher volatility/
substation
low level of uncertainty in uncertainty in magnitude
magnitude
Customer
AC system, many converters Hybrid AC/DC system
internal
structure
Customer
expectations Electricity available when Electricity available when
called upon called upon, open access to
distribution system

Verizon in the past two decades as that industry underwent a transformative

shift driven by mobile phone technology.18
The emergence of affordable mobile phone technology catalyzed the
decline in demand for wired-phone service. Telecommunications companies
faced a shrinking base of customers from which to recover their investments
in the infra- structure to support wired-phone service and the risks associated
with prospective investments to support the development of mobile
networks. By embracing

18. For additional examples of disruptive technological change and companies that have success-
fully and unsuccessfully managed the transition to a new industry paradigm, see Chapter 7 by
Sioshansi.