Monday, February 26, 2007

Will Solar Electric Systems Hurt Utilities?

I found this comment from a recent newspaper article interesting (source)

"Needless to say, electricity utilities are watching the solar revolution with horror. Companies in Japan and Germany have already seen an erosion of profits because of an effect known "peak shaving". In essence, the peak wattage of solar cells overlaps with hours of peak demand and peak prices for electricity in the middle of the day, crunching margins."

I believe the article. But as I write in my last posting - I forecast that space and water heating will be increasingly electric (hopefully using heat pumps), and transportation will be increasingly electric (using plug in vehicles and electric mass transit). So in general, we will be seeing electricfication and movement away from oil and natural gas. Thus I see electric utility's market/sales continuing to grow.

We are starting to see utilities wanting to own wind farms here in Wisconsin (rather than signing a power purchase agreement with a third party wind farm owner). A trend that suggests utilities are starting to get renewables. Perhaps utilities (or their non-regulated utility entities) will get solar electric systems one day and own solar electric systems on their customer's sites. That could be a great growth area for utilities.

If solar becomes common - the utilities peak will move away from the mid-day hours towards evenings, and towards cloudy winter days. Either a dispatchable power source will be needed (biomass plants?) and/or the batteries in plug in cars and other devices could be used to store power for periods of hours and a few days (given we have a smart grid).

So don't worry utilities - solar will not put you out of business, nor will carbon taxes, increases in natural gas prices, or more efficient homes. You will only need to get smarter - and let more happen at your customer's sites (generation, storage, load shifting, etc.)

Electrification even more than you predict is quite possible, even likely. Most notably, the move to an ever greater electrification of transportation.

* PHEVs -- Plug-In Hybrid Electric Vehicles
* EVs -- electric vehicles
* Electrification of railroads (hopefully making the diesel-hybrid trains into ones able to draw directly from overhead wires, like in Europe, thus enabling a phased introduction of electrification into the rail system)

And, a disagreement -- I hope -- that solar hot water heating will become an ever greater part of the path for thermal heating.
My electricity provider offers a plan where customers pay for electricity based on market values. The rate changes from hour to hour, and day to day, depending upon demand. Since I'm planning to buy a PHEV, I was happy to enroll. I've calculated that with an electric car, such as the Chevy Volt, my cost for 'electric' fuel will be like buying gasoline at 26 cents per gallon! I also have a small PV system. If I'm able to enlarge it to the point where it is able to supply the energy necessary to charge the PHEV, I'll be driving on free fuel!
Looking for the renewable energy now then solar and wind is the best for that..Renewable energy kent
Utilities companies should spend less time thinking about their profits and more time considering how they can embrace renewable energy across the spectrum and give us eco-warriors a helping hand!
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