March 14, 2017 greenhoper 5Comment

As per the article “A World Turned Upside Down” from ‘The Economist’ which depicted a rather gloomy outlook for renewable energy. This was not because of switching political winds, like a might expect, or the oft-repeated fact that the sunlight does not shine at night. Instead, the experts pointed to two under the radar facts. First, building away the infrastructure required to reach critical mass for renewables will be tremendously expensive. Second, the economics around the receipt and delivery of electricity are changing dramatically, largely as a result of impact of renewables. As the two facts themselves are indisputable, the conclusions sketched from choices less so.

The story proceeds point out how utility profits are falling. Renewables cost much less to operate, which brings prices down. Plus, when folks put solar panels on their roofs, they not much longer need to buy electric power from utilities, at least not during the optimum sunshine hours. However, they still expect the electricity to provide power to them when the sunlight goes down. That requires a lot of resources for the utility that someone needs to pay for.

Money to maintain the roads is essentially gathered from state and federal government taxes on gasoline. Because more people shift to efficient hybrids or completely electric cars, less money is collected for street repairs, even though the amount of driving remains roughly the same. This can be a concern you can expect to hear more about in the future and it will likely cause some consternation, though I avoid expect to see getting rid of EV’s extensively supported as the solution.

It’s also important to note where the example falls apart. Roads are maintained largely by the government as public facilities and paid for through taxes. Most of the electric grid is possessed and maintained by private interests that are expected to show earnings each quarter. This big difference is the current point of pain.

In some ways, this is looking at the next century’s energy infrastructure through previous century’s glasses, but still, as the author says, “long-run solutions do not solve short-term constraints. Utilities have been bringing up concerns over this concern for many years, as witnessed by this 4 year old Disruptive Challenges statement from the Edison Electric powered Institute, which states:

“Recent technological and economical changes are expected to concern and transform the electric utility industry. These changes or “disruptive challenges” come up due to an affluence of things, including: slipping costs of distributed era and other distributed energy resources; an increased give attention to advancement new DER¬†technologies; increasing customer, corporate, and political interest in demand-side management technologies; government programs to incentivize selected technologies; the weak price of gas; delaying monetary growth trends; and rising electricity prices in certain areas of the country. Taken together, these factors are potential “game changers” to the Circumstance.

Electric utility industry, and will probably considerably impact customers, employees, investors, and the availability of capital to fund future investment. The timing of such transformative changes is uncertain, but with the potential for technological innovation becoming economically feasible due to this record of energies, the industry and its stakeholders must proactively examine the influences and alternatives offered to treat disruptive challenges promptly.

5 thoughts on “The Mounting Twinge of Renewable Energy

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