Wall Street Journal: Solar a “Mortal Threat” to Utilities

Picture: NASA (PD)

Peter Sinclair writes at Climate

Denial Crock of the Week:

Three weeks ago, I had my 5 minutes at a local “listening session” on energy, put on by the Governor of my fair state.

My main message was that a technological sea change is coming in energy production – and if regulatory and utility policy do not anticipate the further build out of wind, solar, and distributed energy, the transition is going to be ugly.  Traditional energy producers who think they can hold back the tide will be like typewriter makers trying to bad-mouth word processors. They are going to go away.

Last week had coffee last week with a well-informed friend, who agreed with me that this is an oncoming freight train. He pointed me to some new survey results from Ernst & Young.

Renewable Energy World:

We conducted a telephone survey of executives involved in corporate energy strategy at 100 companies with revenues of US$1 billion or more. Questions focused on energy spend, types of energy used, energy strategy, and outlook.

The companies were those in energy-intensive sectors with a balanced global distribution. 72% have revenues exceeding US$1 billion, and 28% revenues of US$10 billion or more.
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41% of respondents report generating some form of renewable energy with company-owned or controlled resources. Most of these generate power with photovoltaic solar (25%), followed by biomass/biogas generation (20%) and the use of biofuels in company-owned fleets (19%). Wind and geothermal have 7% uptake.

Renewable energy still makes up a relatively small proportion of company generation though. Only 11% of respondents say it accounts for more than 5% of their total energy production.

This looks set to change though:

  • 51% of respondents say company-owned renewable generation would increase over the next five years
  • 16% expect it to increase significantly

As photovoltaic solar hits grid parity at more and more regions of the country, big customers are going to make investments in producing their own power. Many of them will still be connected to the grid as a back-up, but will expect to be able to sell their excess power generation onto the grid. They will make those desires known to their political allies.

Electric utilities will see their revenues drop, and will be forced to raise rates on remaining customers, further encouraging those customers to explore their own generation options as technology improves.

This is the making of a classic utility death spiral – and it is coming on like a tidal wave that will be as irresistible as  the internet, and just as disruptive.

Read more here.

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  • Anarchy Pony

    Maybe those utilities should, oh I dunno, get into renewables themselves, instead of continuing use of their dinosaur fuels.

  • alizardx

    Holding a monopoly on power distribution and having to spend less money on energy consumables and less capital investment on power plants is A Bad Thing for utilities?

    • http://hormeticminds.blogspot.com/ Chaorder Gradient

      Well its about becoming more of a middle-man bottom feeder selling unused power of real producers, rather than a top-down cartel style where they’re the only producers. It may be a great deal for them, but it’s still a step down.

      • alizardx

        I think the real fear of solar is exclusively from fossil fuel interests. Which include some utility companies that own their own coal mines. But utility companies go where the profit is. PG&E in CA doesn’t subsidize CFLs because they love people, they do it because it’s more cost-effective to subsidize efficiency than to build new generator capacity.

        • http://hormeticminds.blogspot.com/ Chaorder Gradient

          i agree, and expect that to be the case eventually, but this article was mostly about non-energy businesses adopting their own energy producing endeavors cutting out the main energy corporations thus marginalizing them ever so slightly.

  • Charlie Primero

    Socialized energy production is beginning to enjoy the same effects socialized health care and socialized education had for those industries, more monopoly for giant corporations, lower quality, higher prices, less innovation. The joys of National Socialism are endless!

    • http://twitter.com/RayButlers Ray Butlers

      yes, that’s true of Opposite Day. Clever method of name-calling, by the way!

    • Andrew

      You need to read up on all the innovations going on in solar energy technology. You shouldn’t have to because much of it has been covered here on disinfo, but apparently you’ve missed it. We’re getting closer to cheap, decentralized, personal solar energy production all the time. Eventually individuals and families will be able to power their own houses most of the time. I don’t see anything particularly “socialized” about that. Unless you believe oil corporations are people and human beings aren’t.

      • Charlie Primero

        I’ve been trying to install REAL, in-my-home, http://www.otherpower.com alternative energy for 30 years, not checking the silly “buy green” box on my electricity bill for warm fuzzies. The cost ratios never work for the common man because National Socialism subsidizes your “Oil Corporations” to the tune of $88 BILLION a year http://en.wikipedia.org/wiki/Energy_subsidies Stop the socialism and free people will innovate local solutions.

        • Andrew

          Nobody mentioned “checking the silly “buy green” box on my electricity bill for warm fuzzies” but you. Try reading some of disinfo’s earlier posts about solar innovations instead of bleating about socialism every time the subject comes up and maybe it’ll help your efforts towards energy independence.

          • Charlie Primero

            I don’t need more information about solar. I need alternative energy to be competitive with corporate energy. That will never happen as long as the Oil Corporations are socially subsidized. Stop the socialist corporate subsidies and alternative energy will flourish.

          • Andrew

            Perhaps you should have explained that at the outset. Your initial comment seemed to imply that solar was some sort of communist plot.

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