White House Chronicle

News Analysis With a Sense of Humor

  • Home
  • King’s Commentaries
  • Random Features
  • Photos
  • Public Speaker
  • WHC Episodes
  • About WHC
  • Carrying Stations
  • ME/CFS Alert
  • Contact Us

Disruptive Technology Hits Electric Industry

June 23, 2013 by White House Chronicle 6 Comments

If you are reading this by electric light, you are connected to the electric grid Unless, that is, you are one of an infinitesimal number of home owners who installed solar panels.
 
The penetration of solar panels may be statistically insignificant today, but to the electric industry these panels, and other self-generating schemes, are like dry rot: a threat to the whole edifice.
 
It is not just those panels that are beginning to disrupt the electrical grid, but the whole panoply of alternative technology; wind, geothermal heat, micro-hydro turbines and scattered natural gas turbines all fit into a new category of electric generation known as “distributed generation.”
 
The change is so threatening to the investor-owned electric utilities and their not-for-profit colleagues in the public power sector that it has begun to dominate discussions on the Web and wherever utility executives gather.
 
Early this year the Edison Electric Institute (EEI), which represents the investor-owned utilities that provide 70 percent of U.S. electricity, issued a white paper discussing the disruptive changes that are beginning to threaten the old electric paradigm. The theme of change also dominated the EEI annual convention in San Francisco earlier this month, with CEOs talking about a “new business model,” although they were hard put to say what this will be.
 
The root cause of the problem is that the new entrants into generating treat the grid as kind of open marriage: there when it suits them. A home owner, might be self-sufficient in electricity, and even generate enough to sell a small portion back, to the grid 90 percent of the time; but during prolonged bad weather, or if the home system is down for maintenance, that home owner expects to flip a switch and go back on the grid. The local utility, all the while, has been standing by hoping to sell that home owner a few watts until the home system returns to power.
 
This applies even more so to large users of electricity, including factories and big retailers. Many of the factory customers generate nearly all of their own electricity already and big retailers are getting in the game. Walmart is covering its store roofs with solar cells. McDonalds has eyed self-generating for years, but not without the comforting assurance that the grid will always be there.
 
All of this distorts the financial as well as the physical infrastructure of the utility industry and produces social problems as well. Ted Craver, CEO of Edison International, the parent company of Southern California Edison, told the EEI conference that as California is “ground zero” for rooftop solar, you have to ask “are you creating a system of those who have means for self- generating and shifting the burden to the have-nots? It is a social fairness question.”
 
The system is also skewed, Craver noted, by subsidies for alternative generation. He called for a flexible system that allows for these new realities.
 
Another threat, according to Tom Fanning, CEO of the giant Southern Company, comes to the ability of utilities — one of the most capital-intensive industries is the world– to raise money. “Our industry raises about $90 billion a year and we need policies that support that,” he said.
 
There are other problems facing the electricity industry, which are cataloged in an amusing and readable book by economist Steven Mitnick, “Lines Down.” While Mitnick is more optimistic about the future of the grid than many, he says it needs fixing. It has been starved of investment and needs upgrading, particularly hardening against the storm outages that are standard in America but not in Europe, Japan and South Korea.
 
The future of the grid is not in the hands of the utilities alone, but also the regulators, federal and state, and politicians. That means that the new paradigm may be a long time in coming, while another aspect of the U.S. infrastructure deteriorates. — For the Hearst New York Times Syndicate

 
 
 
 
 
 
 
 

Filed Under: King's Commentaries Tagged With: alternative energy, disruptive technology, Edison Electric Institute, Edison International, electric utility industry, solar energy, Southern Company, Steven Mitnick, Ted Craver, Tom Fanning

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
A Commencement Address — Get Used to Rejections, We All Get Them Sometimes

A Commencement Address — Get Used to Rejections, We All Get Them Sometimes

Llewellyn King

It is school commencement season. So I am taking the liberty of sharing my column of May 10, 2024, which was first published by InsideSources, and later published by newspapers across the country.  As so many commencement addresses haven’t been delivered yet this year, I thought I would share what I would have said to […]

Can Our Waterways Provide a New Source of Baseload Power?

Can Our Waterways Provide a New Source of Baseload Power?

Llewellyn King

This article first appeared on Forbes.com Virginia is the first state to formally press for the creation of a virtual power plant. Glenn Youngkin, the state’s Republican governor, signed the Community Energy Act on May 2, which mandates Dominion Energy to launch a 450-megawatt virtual power plant (VPP) pilot program. Virginia isn’t alone in this […]

The Problem of Old Leaders — Churchill’s Sad Last Years in Office

The Problem of Old Leaders — Churchill’s Sad Last Years in Office

Llewellyn King

Old age is a thorny issue. I can attest to that. As someone told my wife about me, “He’s got age on him.” Indubitably. The problem, as now in the venomously debated case of former president Joe Biden, is how to measure mental deterioration. When do you take away an individual’s right to serve? When […]

How Technology Built the British Empire

How Technology Built the British Empire

Llewellyn King

As someone who grew up in the last days of the British Empire, I am often asked how it was that so few people controlled so much of the world for so long? The simple answer is technology underpinned the British Empire, from its tentative beginnings in the 17th century to its global dominance in […]

Copyright © 2025 · White House Chronicle Theme on Genesis Framework · WordPress · Log in