Generations to come
Utilities Unbundled - Issue 15
How will utilities adapt if the generation business erodes?
“In some advanced markets where distributed sources are viable … the generation market already looks very different.”
— Alison Kay, EY
Does the growth of distributed generation – that is, power generated where it is used, rather than supplied from a central source – represent a potential threat to the traditional utility business model?
The Edison Electric Institute (EEI), which represents US investor-owned utilities, has suggested that utilities could be overvalued on the stock market because investors haven’t fully understood the impact of decentralized generation.
The conservative position is that while the sector can expect disruption, utilities and the grid will remain important for a long time, with a timeline of 20-30 years to see wholesale transformation.
But if, for example, solar grid parity becomes a widespread reality and some modern-day Edison invents a low-cost energy storage solution that addresses its intermittency, change could be upon us faster than we imagine. In some advanced markets where distributed sources are viable, including southern California, the generation market already looks very different.
Historically, utilities have been slow to respond to change – will this be different in the generations to come? We explore this and a variety of topics in this issue. Take a closer look:
- Who’s got the power? We explore how distributed generation could shape the future for utilities
- Renewable views: predictions for the next decade in renewable energy from Ben Warren
- Nuclear goes modular: will the smaller, cheaper, safer design of small modular reactors win over critics?
- AGL reinvents the rate case: “ask before you dig” – the Atlanta gas giant’s innovative approach to rate recovery
- Big solar rising: challenges and opportunities facing the world’s largest solar energy project
- Distributed generation hits the big numbers: the inexorable advance of self-generation in Germany – and one major utility’s response
- Sparking innovation: utilities must innovate faster to create value in future, says Eurelectric’s Susanne Nies
- The dilemma of EU-11: how will Central and Eastern European countries meet demanding EU energy targets?
- China’s quest for gas: China grapples with the economics of shale gas extraction
- From utility to futility? Will homegrown power doom traditional utilities? NRG’s David Crane thinks they face a mortal threat
We welcome your views on all the subjects covered in this issue; contact details for our authors are listed throughout. I’d also like to thank our many contributors – utility leaders, regulators, industry commentators, and politicians – who have generously given us their time and insight to create this issue, my first as lead editor.