This is only the base argument. It is actually far worse than that. As far as grid energy is concerned, I can build the power equivalent of the Hoover Dam in any city anytime starting now. Worse, all the technology is standard off the shelf equipment. After we have done that, we can introduce an experimental modification that will ramp that output up several times. If anyone actually cares at that point.
The
take home is that local grid can work if you replace all power
production with this geothermal protocol. Dams, Thermal, Windmill
and Nuclear can be shuttered and transmission lines decommissioned.
With that cost collapse, the convenience of local grid power sharing
will allow customers to stay on board.
The
real take home of course is that the mega power grid system is
utterly doomed simply because it is obsolete. Our real problem will
be the expensive process of decommissioning a century of build-out.
There are a lot of dams I want to seriously tear down and there is no
end of Nuclear that I wish to see decommissioned.
Barclay's
downgrade is correct and it is the beginning of a long slide
comparable to the decline of the Bell system over the past thirty
five years.
How Solar Will Destroy The Power Companies, In 5 Easy Steps
By Rob
Wile
Sun,
8 Jun, 2014
Barclays
recently downgraded the
entire U.S. electric utilities sector to "underweight" on
the threat posed by widespread adoption of solar-storage.
These systems allow homeowners to use rooftop solar panels and a
battery to cut all but the figurative emergency backup cord to their
local electric grid, putting a severe strain on an industry that has
been a defacto monopoly.
The
firm's sweeping case focused in large part on debt markets' apparent
ignorance to challenge utilities are facing. We wanted to zero in on
the astonishingly simple steps that makes Barclays lays out to make
shaking up utilities quite possible.
1)
Solar prices come down
For
the past few years, we have been quietly living through a stunning
drop in prices thanks to an unintended loop of massive European
subsidies and capacity overexpansion in China. As a result, from 2006
to 2013, photovoltaic panel prices dropped nearly 70%.
The
next step is for storage prices to fall too. Cheap storage is key so
that people can have power at night, when the sun is down.
Right
now, the cost of such systems — about $0.22/kWh is only competitive
with retail electricity in Hawaii — the cost of vanilla electricity
in California is $0.15/kWh. Barclays says Tesla has single-handedly
brought down the cost of batteries over the past few years, from
about $1,000/kWh in 2009 to $300/kWh in early 2014. If the company's
gigafactory
successfully
ramps up,
costs could plummet.
2)
The defection spiral commences
Once
the prices for everything get cheap enough, homeowners begin to leave
the grid.
There
remains huge demand for solar, and as costs continue to fall, the
price point will continue to match that sought by ever lighter hued
green thumbs. This expanding scale will in turn make it more
expensive to stay on the grid, bringing even more customers into the
solar-storage orbit. "...Once solar + battery approaches
the retail cost of power, its advantage can scale quickly,"
Barclays says.
3)
Utilities flail around in their state capitols seeking relief
We've
already seen this in Arizona, where the state's electric utility has
spent more than $3 million on a campaign to discourage solar adoption
in the state. California utilities also won new surcharges, and
SolarCity recently charged them with slow-walking grid connections.
Neither will prove more than speedbumps in the long-run, Barclays
said. "W hile they may slow the penetration of solar, any
relief they offer utilities is likely to be short lived. In Arizona,
the fee increases the cost of a rooftop solar installation about 5%.
With the costs of solar installations falling about 10% per year, we
expect the pace of installations to recover before the end of 2014.
While we need more months of data to confirm our view, this may prove
to be an example of how quickly the technological/cost curve can
overtake regulatory responses."
4)
The decommissioning process begins
As
demand for baseload generation becomes less consistent, utilities
could be forced to replace aging power units earlier than scheduled
with more modern and efficient "peakers." This could end up
lowering utility margins, as well as bring forward cost loads.
This
is the key moment: Utility companies being forced to upgrade their
plants in the face of a declining customer base. That's a killer
combination.
5)
The market turns
In
Germany, aggressive subsidies and a move away from nuclear led to an
explosion of renewables expansion. Since the beginning of 2010
(though for reasons that go beyond simply that outgrowth), Germany’s
two largest utilities had stock price declines of 55-60%, compared
with a near 60% gain in the DAX.
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