Amy gahran | greentech media | 22 march 2016
To read the full article in Greentech Media, click here.
With solar exploding in growth around the U.S., conventional power plants are starting to get pushed out of the market. That could result in $2 billion in lost revenues for power providers in the next few years. The grave situation faced by German utilities may finally be playing out in America.
Utilities won’t just be losing revenues from stranded generation -- some predict they may lose their customers to grid defection as well. According to a 2015 analysis from the Rocky Mountain Institute, CohnReznick and Homer Energy, electricity sales in the Northeast could drop by nearly $39 billion by 2030 due to the proliferation of rooftop solar and distributed storage.
Matt Mooren noted: “Growth in distributed energy resources is an upside for distribution utilities in deregulated states, since their regulated utility business model hinges upon transmission and distribution infrastructure.”
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Matt continued: “Customers want to know: What would it take to achieve 99.999 percent reliability? Because 99 percent reliability means that for 87.6 hours per year, you have no power. Achieving that last few percent is very capital-intensive.”
And commenting on vertically integrated utilities, Matt mentioned that: “Load defection can become a risk if they lose their generation investment and don’t position themselves for grid investment.”