Delivering electric power across the United States was an incredible accomplishment that spanned decades. From the early electric ‘grids’ in urban areas dedicated to bringing electric light to millions of customers to the giant electric GRID that we have today has changed modern society forever.
there are many issues with the current grid. The fact that it has been built over many decades with aging technology is not the least of the problems. The aging grid looses power, and transmission losses are increasing as the equipment ages. High temperature superconducting materials were supposed to be the cure, but so far, no economical solution has been developed.
Cost per mile for installing new distribution cable have increased making it a significant burden to bring 3 phase electric power to remote locations like farms and land based oil rigs. Farmers have had to compromise with single phase power to their remote irrigation systems which can reduce efficiency by 30%. And the cost per mile of installing new grid connections were high enough to keep T. Boone Pickens out of the wind energy market in West Texas.
After more than a decade of development solar power capital costs have come down from over $10/watt to just over $2/watt. From the utility standpoint, the capital cost of building power generation resources an important measure in where to make investments to improve power availability. For markets where the cost of electricity is high and adding new capacity is difficult, solar is an attractive option. More so because in many situations solar can be installed at the point of use, eliminating transmission costs.
Solar power suffers from being unpredictable. When it works, it works well, no moving parts. When there is no sun, there is no power. So solar and wind power both suffer from availability issues. Which is what makes Elon Musk’s Solar City investment so interesting. By combining Tesla’s battery storage expertise with Solar City’s cost efficiency in the solar market, there is a path to overcoming the intermittent aspect of solar power. This strategy applies primarily to residential customers and makes grid independence feasible for many customers. It also supports electrical car charging without straining the utility system’s generating capability.
If there is a serious trend toward decentralized power and energy independent consumers, how will this impact utilities in the future? The loss of revenue could be serious. In the case of Austin Texas, the local utility had to raise rates by more than 20% over the last few years as the State of Texas mandated that the utility pay customer to use solar panels. The further impact is that the Grid might not be the means of delivery for electrical power to consumers. Large industrial and commercial users will still need the power infrastructure, but the overall market makeup will change forever.