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

The Uber Effect on Electricity

January 25, 2015 by Llewellyn King 1 Comment

Leon Trotsky said, “You may not be interested in war, but war is interested in you.” The same thing might be said about disruptive technologies.
The U.S.. electric system, for example, may not be interested in disruptive technology, but disruptive technology is interested in it. What Uber and Lyft have done to the taxi industry worldwide is just beginning to happen to the electricity industry; and it could shock consumers – particularly the less affluent – as surely as though they had stuck their finger in an electrical outlet.
The disruptive revolution is not only happening here, but also in Europe, as Marc Boillot, senior vice president at Electricite de France (EDF), the giant French utility, writes in a new book.
Ironically, here in the United States, disruption of the otherwise peaceful world of electric generation and sale last year was a bumper one for electric stocks because of their tradition of paying dividends at a time when bond yields were low.
The first wave of disruption to electric generation has been a technology as benign as solar power units on rooftops, much favored by governments and by environmentalists as a green source of electricity. For the utilities, these rooftop generators are a threat to the integrity of the electrical grid. To counter this, utilities would like to see the self-generators pay more for the upkeep of the grid and the convenience it affords them.
Think of the grid as a series of spider webs built around utility companies serving particular population centers, and joined to each other so they can share electricity, depending on need and price.
Enter the self-generating homeowner, who by law is entitled to sell excess production back to the grid, or to buy on the grid when it is very cold or the sun isn’t shining, as at night. The system of selling back to the electric company is known as net metering.
Good deal? Yes, for the homeowner who can afford to install a unit or lease one from one of a growing number of companies that provide that service. Lousy deal for the full-time electricity customer who rents or lives in an apartment building.
There’s the rub: Who pays the cost of maintaining the grid while the rooftop entrepreneur uses it at will? Short answer: everyone else.
In reality, the poor get socked. Take Avenue A with big houses at one end and apartments and tenements at the other. The big houses — with their solar panels and owners' morally superior smiles — are being subsidized by the apartments and tenements. They have to pay to keep the grid viable, while the free-standing house – it doesn't have to be a mansion — gets a subsidy.
It's a thorny issue, akin to the person who can't use Uber or Lyft because he doesn't have a credit card or a smartphone, and has to hope that traditional taxi service will survive.
The electric utilities, from the behemoths to the smallest municipal distributor, see the solution in an equity fee for the self-generating customer's right to come on and off the grid, and for an appreciable difference between his selling and buying price. Solar proponents say, not fair: Solve your own problems. We are generating clean electricity and our presence is a national asset.
EDF's Boillot sees the solution in the utilities’ own technological leap forward: the so-called smart grid. This is the computerization of the grid so that it is more finely managed, waste is eliminated, and pricing structures for homes reflect the exact cost at the time of service. His advice was eagerly sought when he was in Washington recently, promoting his book.
While today’s solar may be a problem for the utilities, tomorrow’s may be more so. Homeowners who can afford it may be able to get off the grid altogether by using the battery in an all-electric car to tide them over during the sunless hours.
The industry is not taking this lying down: It's talking to the big solar firms, the regulators and, yes, to Elon Musk, founder of electric-car maker Tesla Motors. He may be the threat and he may be the savior; those all-electric cars will need a lot of charging, and stations for that are cropping up. There’s a ray of sunshine for the utilities, but it's quite a way off. Meanwhile, the rooftop disruption is here and now. — For the Hearst-New York Times Syndicate

Email, RSS Follow
Email

Filed Under: King's Commentaries Tagged With: disruptive technology, electric grid, electric utilities, Electricite de France, electricity, King Commentary, Lyft, Marc Boillot, net metering, smart grid, solar power, Uber

Comments

  1. Akhtar Ansari says

    January 26, 2015 at 11:32 pm

    Nice article and good point raised, but slightly disappointing for solar generation perspective.
    One of the possible solution could be to redesign the Net-metering tariff. The grid maintenance cost can be factored into the export tariff, with which the rooftop solar customer is incentivised during the net-generation. There could be something like "Grid Maintenance Cess" for the exporting mode. It should not be seen as a penalty, rather it should be projected as cost of service for facility to feed back into the grid. 

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

White House Chronicle on Social

  • Facebook
  • Twitter
  • Vimeo
  • YouTube
PBS Has a Future by Leaving the Past Behind

PBS Has a Future by Leaving the Past Behind

Linda Gasparello

Over the years, I have often been critical of the Public Broadcasting Service. That in spite of the fact that for 28 years, I have produced and hosted a program, “White House Chronicle,” which is carried by many PBS stations. It is an independent program for which I find all the funding and decide its […]

Notebook: Requiem for American Justice

Notebook: Requiem for American Justice

Llewellyn King

I have loads of my words to eat, a feast of kingly proportions. I don’t know when I started, but it must have been back when I was traveling on the speaking circuit. It doesn’t matter. This tale of getting it wrong starts in London, where I was asked to address a conference on investing […]

How Crowdfunding Brought a New Wind Technology to Market

How Crowdfunding Brought a New Wind Technology to Market

Llewellyn King

A California company, Wind Harvest, is in high gear to change the dynamics of wind energy and to vastly improve the economics of wind farms.  But the company wouldn’t be marketing to large energy users and wind farm operators today if it hadn’t used crowdfunding for its recent rounds of financing. Crowdfunding can get a […]

Notebook: Friends Who Share Friends Are the Nicest People

Llewellyn King

I treasure the friends who share their friends. One of those friends, Virginia “Ginny” Hamill, has died.  I met Ginny at The Washington Post in 1969, and we became forever-friends.  Ginny had an admirable ascent from a teleprinter operator to an editor in The Washington Post/Los Angeles Times News Service. She was promoted again to […]

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