The Utility Death Spiral
By Michael Schweibinz
Solar and wind energy solutions are sweeping across the nation. This trend has left traditional utility providers concerned about their ability to compete economically and environmentally. This was a hot topic at the 25th annual SRI Conference.
Solar panels, distributed storage, electric vehicles, and home energy management platforms are providing consumers direct technology and causing widespread disruption among traditional electric utilities. “This progression has enabled third-party companies to erode the market share of incumbent utilities that have mostly operated in a limited competitive environment.”
Many nuclear power utilities are also struggling to remain fiscally competitive given their inefficient ageing reactors. Exelon, for example, says it needs an additional $580 million per year in revenue to make up for its nuclear fleet’s losses. But the state of Illinois isn’t buying it. And, the second-largest nuclear utility, Entergy, already closed its uneconomical Vermont Yankee reactor. For both of these companies, growing operational and maintenance expenses have driven them to shutting down reactors or hoping for bailout.
“Americans ‘overwhelmingly’ prefer solar and wind energy to coal, oil, and nuclear energy.” An article in Forbes published on New Year’s Day reported on the results of a ten year study focused on U.S. consumers by Harvard Professor, Stephen Ansolabehere, who explained during an appearance at the University of Chicago that “90 percent of them want more solar and wind power; 80% want a lot of it. “That means a lot of Republicans like solar and wind more than coal. Everybody likes those sources. This is non-partisan.”
Americans are voting with their dollars, and the evidence is hard to miss. A new solar installation—a mostly rooftop solar—is now being installed every 2.5 minutes in the U.S. Last year the volume of solar installations was one every four minutes, next year it will be one every 90 seconds. “If Americans can provide themselves and their families with their own electricity, and the cost is competitive, they’re going to do that.”
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Posted: March 11, 2015