A Death Spiral for Utilities?

I’ve been doing some reading about the problems facing the electric utility industry worldwide — and there does seem to be a growing realization that the model under which electricity providers have operated under for decades is undergoing major changes. In January of this year the Edison Electric Institute, an association that represents for-profit electric companies in the United States, published a report that brought attention to factors that posed major threats to the industry, and made proposals to help mitigate those disruptions.

Here’s an outline of the problem from the report:

Today, a variety of disruptive technologies are emerging that may compete with utility-provided services. Such technologies include solar photovoltaics (PV), battery storage, fuel cells, geothermal energy systems, wind, micro turbines, and electric vehicle (EV) enhanced storage. As the cost curve for these technologies improves, they could directly threaten the centralized utility model. To promote the growth of these technologies in the near-term, policymakers have sought to encourage disruptive competing energy sources
through various subsidy programs, such as tax incentives, renewable portfolio standards, and net metering
where the pricing structure of utility services allows customers to engage in the use of new technologies,
while shifting costs/lost revenues to remaining non-participating customers.

In other words, utilities are under threat because of the development of new technologies that have reduced demand for energy from electric companies, and also government policies that have promoted the adoption of these new technologies.

The disruptions outlined above have led some observers to predict a so-called ‘death spiral’ for utilities which goes something like this:

1. New technologies and programs allow more people to become less reliant on the grid for their energy needs.
2. Loss of revenue from these customers causes utilities to increase charges for customers overall.
3. Increased charges causes more people to install cost-saving systems, and maybe leave the grid altogether.

The Edison Institute report raises this alarm:

While tariff restructuring can be used to mitigate lost revenues, the longer-term threat of fully exiting from the grid (or customers solely using the electric grid for backup purposes) raises the potential for irreparable damages to revenues and growth prospects. This suggests that an old-line industry with 30-year cost recovery of investment is vulnerable to cost-recovery threats from disruptive forces.

The report proposes that utilities take immediate action to mitigate against these threats by adding monthly customer service charges to cover fixed costs, implement tariffs on customers who use distributed energy resources (such as solar systems), and revise net-metering policies where customers are able to sell energy back to the grid. This debate is already playing out in various places around the world, such as Arizona, where the public utility is claiming that subsidies and credits to solar customers are creating an unfair playing field putting an unfair burden on non-solar customers.

The report also mentions that at present in the United States there are 200,000 (or 1%) customers using some kind of distributed energy resource.

I have to say that while interesting, the report is sometimes difficult to follow because it is filled with business, legal and financial jargon that I am unfamiliar with — it would be nice if they could write something that the average person could easily understand. The bottom line seems to be that the electricity industry is very concerned about future viability of its business model. They are concerned that shareholder value will increase over time, as well as their ability to raise capital if their business model is see being broken by investors.

All the above is considered in terms of technology that is already available. What happens to this scenario if a technology like LENR comes along (LENR is not mentioned in the report, unsurprisingly)? It’s hard to predict the impact when there is so little known about its capabilities and the products that will be produced, but I would guess from the utilities’ point of view it would be seen as an added reason for alarm when looking at the long-term implications.

Maybe it is time for the utilities to look at changing their business model, and moving from a centralized system to a more distributed one. Could utilities be involved in installing and servicing home or community based energy production systems? Or will it turn out that the electric utility will eventually become an outmoded service whose days are numbered? And during any transition period will power get more expensive for those left on the grid (probably less wealthy people), while more affluent consumers can afford to move off?

It’s hard to say at this point, but it seems that this industry is well aware that things are changing, and that the rate of change is likely to increase.

  • Omega Z

    Problem is most Utilities have been squeezed over time to a narrow profit margin. Pretext for this being tho narrow, mostly guaranteed. A captive customer.

    Note that the Utilities that handle the Grid, Not the power generation, are pretty lean. During disasters, they don’t have the manpower to fix-it in a reasonable time. Thus they have agreements among them to transfer personnel from different Utilities across many States.

    Societal Shifts are changing the dynamics.
    1. Economic decline. Recessions. Demand is still down.
    2. More efficient products. Light bulbs, High efficient HVAC. And cases like myself. A new TV that use 40 watts instead of several 100. Multiply by 10’s a Millions. Future Large Screen OLED systems may use 15 watts including the 2-5 watt speakers.

    People who produce Some of their own energy or the Approximately 300,000 people off grid are technically insignificant percentage wise.
    (Considering 150 Million homes plus the Commercial/Industrial base that uses nearly half of all energy in itself.)

    The Utility problems are from several different sectors. No specific 1 at this time. Most of the Fuss comes from Government shake up mostly telling them to get prepared for the future or get left behind. Behind the scenes I suspect Politicals push a different agenda then what we see.

    Aside from that, I expect a change from Central Power systems, to the Power Companies just redistributed (Micro Grids) being the most likely course given present technology.

    Something many here don’t consider. The present technology wont be individualized until it becomes Plug&Play. Simply because the masses don’t want the hassle. The Grid provides convenience. Only a small percentage will opt out.

    As to Drop in replacement of the current system, the vast majority of these systems have or are reaching End of Life-cycle. In some cases have been temporarily extended out of necessity. Nuclear Facilities are totally none reusable.

    Make no mistake about it. The costs to dismantle these will be payed for by the consumer. Directly or thru Additional Taxes. In some cases, Funds have already been collected & are in invested trusts.(Primarily Nuke & Underfunded.)

    The Grid itself, Poles & wire no longer needed. Another option. Let the People do it. Just mark/designate whats up for grabs. Many would remove & use the poles for fencing at their own expense. Rural co-ops have done this in the past.

    And the Copper wire. LOL. GONE. It is already a problem with scrapers helping themselves.(A National phenomena) Long stretches of wire gone. Even substations. You save a lot & it doesn’t take years. Think months.

    Railroads suffer from this. Intermittently used tracks disappear overnight. About 30 miles from me this took place. About 3 miles worth. The people had trucks, cranes & Waved to the Farmers while doing it. No one knows who did it. This has happened Nationally over the years.

  • Magic Merchant

    Admin

    I would like to purchase a Magic Scrimshaw with enchanted carvings on the remains of a Sperm Whale from your E-commerce portal.

    Is there such an item?

    / Mr Grey

  • Omega Z

    E-cat is prime for Local distribution systems.

    It’s far from ready for home use outside of base load winter Co-heating. Only in certain locals.

    When is Cheap Energy Not Cheap. At 1 cent per Kwh- You produce 5 Kwh’s & only use 1. That 1 just increased to 5 cents.

    E-cat at 1/3 conversion efficiency produces about 2300Kwh per month. Subtract energy to operate the E-cat & Maybe- you’ll produce enough for your monthly Energy use of about 1200Kwh. The Average home use.

    Problem is most of you energy use is in very short periods of time. Most of the time you would be producing excess that goes unused. Gone.
    To alleviate this would require Battery rack storage. This option has an Energy cost/Loss in charging & Discharging them. Your short. Your still on the grid to meet your needs.

    Note that Home generators aren’t very robust, Have short life cycles & are expensive. All costs considered, these systems likely cost more then a local distribution system. If it should go down, it’s up to someone else to fix. If yours goes down, it’s up to you to deal with.

    Until there are major advances in LENR technology & several other areas, Home use is very limited. Non mechanical electric conversion is likely the answer & only then if it’s cheap and Advanced Batteries are necessary in most scenarios to be economical.

    Discussing of conversion loss from AC/DC isn’t necessary as their is a technology Not Used but available that is extremely efficient/Negligible loss.

    • Bernie Koppenhofer

      Omega Z, I agree the traditional power distribution system is far from obsolete, but it is very vulnerable to reduced demand resulting in regulated price increases. These price increases will make LENR very attractive and increase the speed of transition. The economics will be very rough on those left behind. We could be talking about countries being left behind, Germany will not be one of them. There is high stakes poker being played.

      • Omega Z

        Bernie

        To be clear, when I state Local distribution, I’m speaking more of a micro-grid as GreenWin indicates.

        A power center based in city zones. A 1 Megawatt Hot-Cat would probably have much higher efficiencies in conversion & ramping up & down according to demand, therefore offsetting costs of power-lines.

        Individual home systems will depend on other technologies catching up to be of cost/benefit worthy along with improvements in LENR Systems.

    • fortyniner

      Entirely agreed. Until some kind of domestic/local electricity storage facility is available, compact home power sources (including LENR) – even when waste heat is used for domestic heating and hot water – are only half the answer.

      Until then some form of grid, perhaps more local in nature as you suggest, must totter on to provide connection to energy storage facilities (simple water pumped systems for the moment) and ‘top up’ generators, to match excesses to demand, and to provide for those who can’t afford home systems, or have other uses for their money.

      Perhaps a series of semi-independent town/area systems linked to one another by interconnectors to cope with exceptional conditions, might fit the bill.

      • BroKeeper

        All good points.

        To support Omega Z comment we should reconsider short underground distant DC over AC micro grids with something like Siemens HVDC PLUS (VSC Technology) for city connectivity.

        DC transmission is more efficiency, simple, less loss, and less conversion expense with storage advantages? Most modern innovations require inefficient conversions back from AC to DC anyhow. So why not rid expensive middle AC processes?

        http://theenergycollective.com/stevencollier/219976/technology-improves-reconsidering-dc-power

        http://www.energy.siemens.com/hq/en/power-transmission/hvdc/hvdc-plus/?stc=wwecc122921

        • Omega Z

          Bro

          Most people are not aware that a few years ago, A conversation between 2 people lead to a simple fix for AC/DC conversion losses. Don’t recall the exact details, but nearly zero. Negligible.

          In discussion, it was determined that manufacture of your charge adapter you plug into the wall for Cellphones etc, would only cost a penny or 2 more. That’s 10 or 20 cents to the consumer, but a great value to everyone in energy savings.

          A patent was issued for the AC/ to /DC conversion. The reverse has not, But it was said a reverse process was very likely possible. However until 1 vendor picks up on this & uses it in their product & sales promo, it sits unused. 🙁

          As to DC in the home: Considering the Cost & Chaos converting everything over, The Cheap fix is much preferable.
          Convert your house to DC voltage & you immediately need all new Electrical appliances, Bulbs, power tools, vacuum cleaner Everything. In fact what little you have that does take DC will also need new adapter or replaced.

          Note that AC & DC both have plus/minus attributes.
          DC has limited transmission range without using Superconductors. Extremely expensive.
          Thus without superconductors, even cities would require multiple Generating nodes envisioned by Edison. Again you create more costs.

          AC has a loss factor over long distances & thou I don’t know the numbers myself, Discussions indicate as much as 50% over very long distance. Like 100 plus miles from generation to customer.

          Local sourced LENR would eliminate most of this. This in it’s self would reduce Utilities as we presently pay for this loss. It’s all figured in.

          Note as I stated above, Charging batteries has a loss factor in addition, regardless of AC/DC conversion. It’s a separate issue.

          Basically it takes energy to Force energy into the Battery. This is why Batteries get warm/hot when charged & could explode. Thus the need for differently more expensive designed batteries for fast charging.

      • GreenWin

        One of the great benefits of district, community, residential microgrids is they inherently provide backup and Uninterrupted Power Supply (UPS) services. Example: a group of ten community buildings, 8 of which have a 10kW micro-CHP system (e.g. ENER-G, Yanmar IC units or PV and storage) installed. Each unit services its own building AND is an energy node on the microgrid.

        The microgrid supplies energy to the two buildings e.g. church or community center without dedicated micro-CHP. If a node fails – the microgrid load balances providing immediate uninterrupted service until the node is repaired.

        At present this example is expensive without macrogrid. However as LENR emerges, and fuel cell/DER costs drop, the microgrid model becomes viable.

        http://cleantechnica.com/2013/04/03/over-400-microgrid-projects-underway-en-route-to-40-billion-market/

  • Roger Bird

    Here is an interesting video: http://www.nbcnews.com/id/21134540/vp/52207962#52207962

    However, I think that he is already hooked on the fast neutron paradigm, and I don’t see him being able to transcend it and join the LENR crowd.

    • GreenWin

      This is a sweet media-happy hot fusion tale. Taylor gave a TED talk. The comments pretty well tell the story:

      https://plus.google.com/+TED/posts/h3tCVuXLF8K

      • Omega Z

        One of the articles I read about Taylor included a story of another young man,(A couple years older & don’t recall his name.) who had similar qualities in the same field.

        Instead of Nurture, Monitor & encouraging him, His Friends, Family & Academics tried to suppress & discourage him. He has since ran afoul of the LAW(Regulations Etc.) & is a person of Interest to be carefully watched & observed.

        Such is the Norm today. One wonders how many are destroyed by the present system.

        Taylor is 1 of the Lucky exceptions Due mostly to his Family & a few academics being supportive.

        Someone stated they didn’t think he would be receptive to LENR. I think properly presented he may be. He is Not Yet indoctrinated. He is still bent on proving mainstream science wrong in some of their approach & already has in some areas.
        However, he’d have to due it quietly or rick a short career.

        • Roger Bird

          Young people tend to be more flexible. But remember that paradigm shifting has very little to do with intelligence.

          As far as the “Such [suppressing super-bright students] is the Norm today” implies that we didn’t do it 50 or 100 or 300 years ago. Trust me, we did. There is nothing new about it. And it is done in other countries.

          I alarmed teachers because I was meditative. Now I am a meditator and an inner-naut and a philospher. People freak out over anything that is different. It is the human condition.

          • Omega Z

            Roger

            Your right. I misspoke. Although I think it is probably a little more so these days, It is not new…

  • Bernie Koppenhofer

    Let us assume “the powers that be” want to micromanage the transition from fossil energy production to LENR energy production. One important aspect of that transition would be dealing with the electric utility industry losing customers. You tell the industry that “distributed energy” is the wave of the future and get ready for it. (The Germans are not being as subtle) Create some variant of price controls for the industry to ease the transition for the industry and their customers. You allow a huge fracking industry to be established that will supply the gas heat for LENR energy production. Stop and discourage all large traditional energy infrastructure construction. Control the patent process so that “we” do not give away our LENR advantage to “others”. Try to keep the world in one piece so that we can enjoy “free” energy.

    • GreenWin

      Very well reasoned Bernie. Don’t forget the Private off-record meeting Obama had on May 8th with Edison Electric Inst and major electric utility execs. Two weeks later, the Elforsk-Levi report validated Dr. Rossi’s E-Cat HT.

      The USPTO has failed badly with respect to LENR. Others ARE developing this technology. The Italian energy giant Ansaldo Energia, sent Dr. Andrea Aparo to ICCF-17 to discuss their interest in LENR. Ansaldo is now a very hot property on the international energy market, with Doosan Heavy Industries upping their bid from 1.3-1.5B euros ($1.7-2.0 billion.) A half billion dollars higher than previous bids from Siemens AG, and Samsung.

      Ansaldo is minority owned by private American holding company First Reserve, located in Greenwich CT (home to a certain General.)
      The higher valuation of Ansaldo indicates IMO some kind of LENR awareness in the big player energy industry.

  • underachiever

    see stockmarketsreview.com the darker shades of shale

  • http://www.lenr-forum.com barty

    What’s going on the last days? It’s so quiet?

    Is this the silence before the storm? Or are trustworthy, famous people, which supported the LENR field, losing the interest?

    • daniel maris

      Let’s hope it’s not the death spiral of this site…would be nice to have some NEWS as opposed to speculation!

    • Jim

      I fear that they are pre-occupied with lawyers and accountants.

  • CHARLES(SWVA)

    One thing that really bothers me about Rossi’s and Defkalion’s LENR capabilities is the total lack of mention by any (or have I missed one/some) major utility regarding the effect that LENR will have on the generation and/or distribution of power. Not the GEs, Siemens, Appalachian Electric, anybody. Did I miss it all or are they in a silence induced by panic?

    • fortyniner

      I don’t think panic is something these people do within the normal business context. Nor do they tend to keep anyone outside their organisations informed about their projections and business plans.

      It seems inconceivable that the people at the top would not be aware of LENR, so they have a couple of options: (1) dismiss it as not representing an imminent danger to their businesses, or (2) investigate and take whatever steps seem prudent to manage this development (including buying into the technology if an opportunity presents). (1) seems unlikely after the Elforsk report and (possibly) DGT’s demo.

      • AlainCo

        Sure they are not aware of LENR.
        like theyr were not aware of subprime crisis planned in 2004-2005.
        as they were not aware of internet bubble crash.
        as Enron boss, and all the top staff, did not sell their shares while trying to hide the huge loses.

        see appendix D patterns of denials
        http://www.princeton.edu/~rbenabou/papers/Groupthink%20IOM%202012_07_02%20BW.pdf#page=67

        they are blind, point. awareness will spread like the Berlin Wall passed from being a deadly border to a rock concert zone.

      • Roger Bird

        “It seems inconceivable that the people at the top would not be aware of LENR” I have absolutely, positively no problem conceiving it. These are busy people (unlike my fellow goofs on this forum) who encounter a hundred trivialities every day that they have to ignore; LENR would just be another triviality for them. I think that it takes a massive ego to think that what we find to be obviously true should also be obviously true for everyone else.

        • GreenWin

          See my post on Ansaldo Energia. Dr. Aparo who spoke at ICCF-17 is the CEO’s Special Adviser on new technology.

        • fortyniner

          Roger, you have a very strange picture of the way large concerns are run – I assume you have never worked within any corporate business. People at the top of these organisations don’t need to inform themselves on technical issues – they have other people to keep up to speed and advise them of the possible effects of relevant developments.

          Since the Elforsk report, LENR has been far from a triviality, and any technical director or company technical adviser who failed to report on it would be incompetent and likely to experience a short career. As the survival of energy concerns depends on acute awareness of trends and new developments, it is clear that cold fusion will now be closely watched, and summaries will be provided to those who take the decisions. This has nothing to do with anyone’s ego, it is just how things work in the real world.

    • Blanco69

      I can guarantee that some of the big global utilities are aware of lenr. Anders Aaberg of Vattenfall has been on Swedish TV taking about a Rossi presentation in Geneva. Plus, I suspect he has had some form of dialogue with Magnus Holm and the Hydrofusion boys. The thing about utilities is that they see themselves as ecat customers not ecat manufacturers so they’ll sit and wait. This is a mistake in my view. Utilities have always enjoyed a fair degree of stability though either regulation or monopoly. This safe and predictable world in which they exist makes them very risk averse and a bit glacial. However,if the ecat is for real then this level of comfort will disappear. I fear that we won’t see a play from a utility until the deal is staring us all in the face.

  • fortyniner

    Some of the ‘big boys’ are already hedging their bets: “Walmart And Other Big Businesses Prepare For Downed Power Grid With Alternative Energies”

    http://www.offthegridnews.com/2013/09/02/walmart-and-other-big-businesses-prepare-for-downed-power-grid-with-alternative-energies/#

    • GreenWin

      The move to SOFCs like the Bloom Box or CUBE furthers the transition from centralized grid to microgrids. But does this help LENR?? Yes. The LENR reactors in view require heat to reach their activation temp. That heat can be from electrical resistance OR a source of natural gas (Rossi’s gas-CAT.)

      As renewable/alternative microgrids replace century old grid connections, it paves the way for NG-fueled LENR. Microgrids are far more secure than any centralized grid. They generate energy from a variety of sources (fuel cells, micro-turbine, PV/wind, LENR.) And microgrids are gas company friendly. In the US where NG prices have plummeted, this is good business.

      With natural gas as a partner, many more Distributed Energy Resources will be adopted; paving the infrastructure road for gas-fired LENR.

      “Unlike a centralized utility, the microgrid operator is free from the obligation to maintain a large power plant online as backup when cloud cover increases or the wind dies down. Thus during “normal” operations the microgrid facilitates further deployment of renewable energy generating capacity.”

      http://www.ensec.org/index.php?option=com_content&view=article&id=442:islands-in-the-stream-the-compressed-natural-gas-grid-as-an-energy-security-enhancer&catid=137:issue-content&Itemid=422

      • Warthog

        “Some” LENR reactors currently require high temperatures to activate. However, there are some hints of fuel structures that do NOT need heat to “kick things off” (Dr. George Miley is one). Feed in the hydrogen/deuterium until a certain pressure is reached, and “away things go”. WRT LENR, we are barely in the single cylinder Diesel engine stage. No external heat source necessary.

    • Roger Bird

      I would hope that some of you would leave comments about LENR. I did.

    • Roger Bird

      The slant of the article is that Big Companies are getting off of the grid for evil reasons, but when families do it, they are doing it for good reasons.

  • georgehants
  • georgehants

    Science » Technologies and discoveries
    Physics, a culture of criminality.
    By Gary Novak
    There has not been an iota of physics produced since Newton’s laws which is not grossly in error. You say technology works. Engineering is vastly different from science. Engineers use trial-and-error to test superficial effects. Science produces basic reality, which is abstract. You might say that astronomy and optics are easily verifiable. Easy means superficial evidence which does not prove physics to be correct.
    http://english.pravda.ru/science/tech/03-09-2013/125553-physics_culture_criminality-0/

  • Andrew Macleod

    Even with distributed power generation the “grid” is still needed as safety-net and as a way of sharing any wasted energy production. Maybe their new business model should focus on grid matinence and upgrade.

    • Iggy Dalrymple

      I disagree. With distributed energy, there’s no necessity for a macro-grid. Maybe nice to have but if it goes under, no big deal.

      • Roger Bird

        I agree. I think that the grid is so massively expensive and such a delight to the eyes of scavengers (including legal scavengers), that I doubt that it will survive. And all that it does could be done with perhaps say hand carried power stores or sources, or at worse pick-up carried power stores and sources.

        • Iggy Dalrymple

          My next door neighbor is a boat captain involved in salvaging an undersea cable that connects Florida with Africa. He says it’s a copper cable about 4″ or 5″ in diameter.

          • Roger Bird

            ( ( 4.5 × 2.54 )^ 2 ) × π ×4000 (miles) × 5280 × 12× 2.54 = 264211191762 cubic centimeters. Times 8 grams to the cubic centimeter = 2.113689534×10¹² grams of copper. At the current spot price of 0.007208995 per gram, the value of the cable is $15,237,576,667.06 or $15.2 billion. Even if I am off by a factor of 10 because of something I don’t know about, that is still a lot of bread.

  • theBuckWheat

    The biggest asset that the electric utilities have is the system that has wires to every house. Almost every alternative to the present top-down central power generation system such as rooftop solar will still have a need to provide power when the local source can’t provide enough and as a way for the homeowner to sell any excess he produces. The electric utility is the natural, and indeed the only way this can take place, even if the electric utility is generating less power itself.

    What goes unnoticed is just how many Kwh it takes to recharge an electric car. It is roughly as much as it takes to run the central A/C. This energy must come from somewhere. I hope it comes from LENR, but until it does, it only can come from coal and natural gas via utility-grade generation facilities.

    • Iggy Dalrymple

      Just use large enough home unit. If grid is defunct, then so be it.

    • theBuckWheat

      In short, government will not allow electric utilities to go bankrupt because they need them for their transmission and distribution systems to move power around even if people have home systems.

    • GreenWin

      http://www.teslamotors.com/supercharger

      PV is adequate in sunbelts. Other places microgrid connected fuel cells, micro-CHP, Stirling, LENR will obviate not-so-smart grid.

      • Barry

        Hi Greenwin, Seems I’ve heard of a recharge idea where they pull out the battery and replace it with a freshly charged one in less time than a gas fill-up. Don’t know what became of it. I think they were setting up a model system in Israel,

        • Iggy Dalrymple

          The company that was based on that idea, recently went busted. It had planned to launch a nationwide system in Israel.

          Elon Musk also looked at that concept but settled on a rapid charging system.

          • GreenWin

            Iggy’s correct. A Better Place spent $500M on a foolish idea. EV battery form factors are not standardized and may never be.

  • Hope4dbest

    If the utilities go bankrupt and close, what is going to happen to those of us who don’t have the possibility of generating our own energy?

    • BroKeeper

      Should the e-utilities go bankrupt then government would step in, as done with the auto companies, to reduce them to guardians of the grid and regulate price of electricity from independent inputs until grid dependence came to be insignificant enough to supply free E-Cats via social funding.

      The dismantling of the grid would then begin. High LENR device and replenishment tax would replace electric government revenue.

      And the beat goes on.

      • GreenWin

        The dismantling process is modeled by phone companies taking down land lines.

        • BroKeeper

          What?! And beautify the landscape? How dare you!

          • GreenWin

            And long term return the rivers to natural flow, Bro. Someone gotta doit.

            • Omega Z

              Most dams will remain. Only some will be dismantled & some of them will be rebuilt, but more Eco friendly.

              Most dams exist to prevent or control flooding, Navigation & for irrigation systems. Even with Cheap desalination systems, nothing is cheaper then what nature provides for free.

              Regardless of energy needs 1000’s of dams, lakes, ponds are proposed, some just to allow seepage to replenish depleted water tables.

  • Allan Shura

    In basic terms they are renting power production. Often this is to a protected captive market territory. Off grid alternatives have been
    more expensive but that may be changing and the off grid solutions
    also give independence and provide greater security to disruptions as an added benefit.

  • Jim

    This seems like “phase n” of the movement that started in the 90’s to break electric utilities into generation, transmission/distribution and retail service companies, which has been accomplished to various degrees in different states.

    The idea was to allow alternative generation and service companies to compete on the input and output sides of the transmission companies. So Boeing can open gas turbine based power plants and Joe X shows up at my door offering to be my gas company, just sign here. It’s harder to offer competitive transmission capabilities (new power lines), unless of course you don’t transmit, but instead distribute generation, which will also attack central generation and retail service.

    Though given the actual install base and growth rate of distribute generation, it seems like this will be a fairly slow motion “disruption”.

    • GreenWin

      “The Edison report makes it abundantly clear that the game has already changed. Somebody took the old ball and replaced it with a new one. The HBR [Harvard Business Review] article suggests that innovators may change the game itself, and without bothering to tell anybody.”

      http://www.forbes.com/sites/peterdetwiler/2013/04/18/relentless-and-disruptive-innovation-will-shortly-affect-us-electric-utilities/2/

      Disruption in plain sight.

      • Jim

        Thanks for the post.

        I’m drawn to question the “shortly” in the Forbes article title.

        It seems to me that if hard data on significant rates of change were available, along with projected impact dates, we would expect them to be presented. The Forbes article, which is mostly a paraphrase of the Edison report, presents no such information.

        One of the few data projections it does present, is the following:

        “now forecasts declining electric sales from now to 2035, with mid-afternoon peak demand falling almost 20% from just over 24,000 MW to 19,000 MW.”

        2035? Shortly?

        Another opportunity to back up the “Shortly” in the article title is duffed here (re domestic gas-to-electric generation):

        ” It would not occur overnight, but the long-term impact would be inexorably downward as sales volumes would begin to decline.”

        Given the lead times for power construction and investment, it would probably be well for utilities to start making plans now.

        However, it looks to me like “shortly” in this case was bloggerese for “read me, read me, read me”.

        Or maybe my perspective on “shortly” has changed.

        • GreenWin

          Possibly Forbes who hosted LENR columnist Mark Gibbs until his Defkalion faux pas – is assuming a truly disruptive technology such as LENR will shorten long term projections.

  • Roger Bird

    I am curious about what percentage of people life in public utility districts vs. private utilities. For most of my life I lived in the Pacific Gas and Electric Company “district”, the largest in the country at one time. Now I live in the Colorado Springs Utilities “district”. The resistance to change in a public utility district is going to be less the resistance to change in a private utility district for the simple reason that we do not have shareholders. The only problems for public utilities will be employees having to look for other work. And, of course, the change is not going to be instantaneous. This will have a lot to do with resistance to change.

    • Cliff

      The “only” problems for public utilities will be employees having to look for other work? Let’s think about this for a minute.

      Ok, right now, you have huge coal fired or natural gas fired plants that employ an equally huge infrastructure to keep the fuel coming, keep them maintained, keep high tension power lines up and functional, right of ways, railroads, pipelines, roads and other infrastructure. If we switch to more localized plants that do not need ready access to large volumes of fuel with no wires connecting them to the population centers, with no huge turbines that need specialty services to maintain, then you’re saying that the “only” problems are going to be workers finding other work? I don’t think you understand how much of the economy is dedicated to the current electrical grid.

      Whole communities will be affected in lots of ways. This is something that may be mitigated by the Electrical power plants switching over to LENR from coal or natural gass, but keeping the same massive power generation and then little by little replacing their outlying substations and powerlines with dedicated LENR, but it’s going to have a massive effect, over time.

      I welcome that change, by the way, because it means that electricity can become small business or even household appliances and that takes it out of the hands of the electrical monopolies. I think the disruption of the electrical companies will be unpleasant. I think the disruption of the oil and gas industry will be dangerous because of the money involved. However, I think it will be worth it.

      • BroKeeper

        Perhaps we could have an ’emergency human reinvestment tax’ to provide those who risked their lives in mines and other effected specialized employees to upgrade their education, and new skills with per diem. The cheap energy will much more than offset any costs personal or commercial. The question is when during the trnasitions would that take place?

        • Cliff

          Maybe they can find employment tearing down the current infrastructure and building all the new stuff.

          As I envision it, substations with huge high tension lines coming into them will be replaced with LENR Reactors and the local infrastructure can stay pretty much the same.

          Those huge steam turbines and powerlines and coal fired boilers and railroads to the centralized power plants will have to be disassembled and melted down and whatnot, right? People can get work there.

          I just don’t believe in taxing important new businesses to pay for people who need new skills. Let them pay for their own skills. Did we tax the computer companies to pay for all those people who lost their manual jobs to automation?

    • Iggy Dalrymple

      I live in a small town that owns their own micro-grid and they buy power from the macro-grid. Their rate is 12.07¢.

      My wife’s country home is served by a coop and its rate is 14.07¢.

      Nearby Tallahassee generates its own power(mostly natgas) and its rate is 10.77¢.

      Vermont, a do-gooder state, will soon have a 20¢ rate.

      • GreenWin

        Vermont’s “Yankee” nuke owned by Entergy will close next year. It’ll be interesting to see if once the nuke subsidies end, the cost of electricity will go down.

        BTW Ig, some of their electric rates go to pay for Fall leaf painting, which is great for tourism.

        • fortyniner

          Meanwhile in la-la land, Cameron is encouraging the Chinese State to take a stake in the new mega-reactor project at Hinkely point in Somerset.

          http://www.no2nuclearpower.org.uk/news/3-september-2013/

          Perhaps we should be grateful that such nice people have taken an interest in the UK’s energy needs. But before we roll over in gratitude perhaps we should consider the links between energy and security. In most countries the electricity supply system would be classified as a strategic national asset. I cannot conceive of the US or France – or China or Russia – allowing a foreign country to own and control such a strategic asset.

          Cameron’s apparent desperation to get new nuclear going in the UK by any means possible, against the background of the increasingly frightening Fukushima revelations and nuclear shutdown around the world is deeply disturbing.

          • Iggy Dalrymple

            Were it not for LENR and other promising new types of energy, I would favor nuclear plants. Just because a few nukes were poorly designed and managed, shouldn’t condemn the entire industry.

            Having said that, I wouldn’t favor any large new nuke, knowing what I think I know.

            • Roger Bird

              I like the concept of nuclear power, but I do not trust the people in the nuclear industry to make the decisions necessary to switch over to nuclear power plant designs that are known and proven and safe. There are safe designs; there are even safe designs that use and eat nuclear waste, but I don’t see these nuclear crackers (old farts set in their ways; brittle, unbending, like crackers) jumping on these new designs.

          • GreenWin

            So, if tensions arise between China and UK or ally USA, Hinkely Point could suddenly “throw a rod?” Maybe plunging Somerset into a nuke blackout would convince the PTB of their foolishness.

            • fortyniner

              It’s increasingly difficult to fathom what passes for thought in Cameron’s mind. His sole objective seems to be to carry out his sponsors’ instructions, regardless of the cost to himself and to the country.

              I’m pretty sure that the Bilderbergers and the rest of Robert Mockan’s ‘insane oligarchs’ don’t do introspection. If they did they would have all jumped under trains long ago.

              • GreenWin

                Mr. Mockan’s oligarchs have little to introspect and so remain far from the beckoning tracks.

      • Omega Z

        Iggy

        I pay approximately 10.5 cents of which “exactly 5.5 cents” is for the electricity. Grid service is a set fee. $15 a month. With my Average usage makes my Energy costs 6.5 cents. The rest is Fed/State taxes & mandated Fees by said.

        Note I’ve never directly complained about my rates, Hard to justify when seeing what others pay. My contention has been Cheaper is better. My Primary concern being Future projected Rates. As High as $1 per Kwh & possibilities of more after that.

        • Iggy Dalrymple

          Omega Z, how is your electric power generated?

          I’ve noticed that the cheapest states are Louisiana(NG),
          W.Va(coal), and I believe Washington(hydro).

          • Omega Z

            Iggy

            Don’t know. It could be any source as all are available where I Live.

            We purchase energy separate from our Utility as to why I know exactly what it costs. This is a recent event. Comparing Prior bills indicate a half cent per Kwh savings. Prior to this it was about 11.2 Cents all fees included.

            Interesting situation: 1st approach offered same price, but Required a 2 year contract with guaranteed rates for 1st year. Yeah. Kind of like Direct TV & other such deals.

            Early termination would result in a $200 cancellation fee. I Don’t Think So…

            2nd approach from this energy company offered same deal. No Contract. No Termination Fee.

            I think this is only a temporary situation because demand hasn’t recovered in this area.

            Noted a city (Pop. 40K) about 60 miles from me negotiated the same for at least 2 years.

  • Iggy Dalrymple

    Cheap natural gas, alone, is a threat to the grid.
    http://tinyurl.com/NatGasThreat

  • Felix Fervens

    Witness how Spain is penalizing people who generate off-grid solar or how areas with privatized water make it illegal to gather rainfall falling on ones own property. Monopolists with political power are loath to free their slaves.

    As a side note, everyone i know who was coerced into installing a “smart” meter has seen at least a 10% rise in electric bills since the monstrosities were activated. Sheesh, at least they could give us all free mesh wireless internet, as long as they are installing transmitters on every home. Missed opportunity.

    • Roger Bird

      Did not Spain initially subsidize solar, and now they are just asking (nicely, I’m sure [sarcasm]) for their money back.

      It shouldn’t have been subsidized in the first place. This taxing people for their use of solar shows that subsidized is wrong. The market should rule, not governmental “shoulds” and hopes.

    • Iggy Dalrymple

      That’s why we need an annual “Sadie Hawkins Day” for politicians and bureaucrats.

  • GreenWin

    Happy Labor Day to our friends in the States. Enjoy the last days of summer BBQs, refreshing ocean/lake swims and sunshine. 🙂

    Admin raises a very good topic. Essentially, can utilities bridge the gap to next generation energy? Will these slow moving, century old behemoths adapt quickly enough to the Distributed Energy Resource (DERs) model – or go the way of the ice house? The clarion call raised by Edison Electric Inst has now been confirmed in the revered journal Nature (reprinted in stodgy old Scientific American:) http://www.scientificamerican.com/article.cfm?id=us-electrical-grid-on-failure&page=2

    IMO this is all good news for LENR. Because it maps out the new energy infrastructure that will accommodate LENR. Without district, community and residential microgrids, renewables like PV and wind must battle the old and not-so-smart grid. WITH independent microgrids DERs (PV/wind, fuel cells, Stirling gensets, microturbines, LENR, CHP systems) will flourish.

    While PV/wind is a fully renewable DER, it suffers the intermittentcy problem. Various storage schemes smooth the problem but are expensive to scale. Other DERs require natural gas/propane and align well with utility gas companies. This is one way utilities stay in the game. Partnerships between CHP (Combined Heat & Power) and local gas companies build the bridge to a new infrastructure.

    Electric utilities are still facing the death spiral. Do their Boards endorse a war on DERs or do they join the expanding community of renewables and alternatives?? Do they go the way of the ice house or participate in the energy revolution? An immediate way to protect shareholders is to invest in a portfolio of DERs including LENR technology. David Crane’s NRG Energy company appears to be doing this.

    Utilities are faced with a simple choice; adapt and replace lost ratepayer revenue with DER design, manufacture, install and maintenance revenue… or die.

    Either way, I’m goin’ swimmin.

  • fortyniner

    It seems from the parts of the report concerning additional charges, and sgt’s anecdotal evidence that the grid power networks will not accept any transition gracefully, although it has to be said that replacements for centralised power generation seem to be a long way away at the moment.

    However, a shift to more localised or even domestic power production is probably inevitable in the longer term, and our systems will have to adapt. As far as I know, no dinosaur industry has ever accepted its own demise by moving strategically into the new era. Instead they tend to go down in a welter of suicidal increases in charges and underhand attacks on the replacement industry that are damaging to both the intended target and to society in general, but are ultimately doomed to failure.

    I believe that Admin’s comment that “.. during any transition period will power get more expensive for those left on the grid (probably less wealthy people), while more affluent consumers can afford to move off?” is probably prophetic. The electricity industry will try to screw more and more from fewer and fewer of those who can’t afford to ‘upgrade’, until local distributed systems arrive that can take these people too off grid. There will be many miles of aluminium and copper cable and scrap galvanised towers available at knockdown prices when this finally happens.

    • BroKeeper

      There are few options for a cornered beast. Fight to the death or caged.

    • GreenWin

      “Instead they tend to go down in a welter of suicidal increases in charges and underhand attacks…” fortyniner

      “When will they ever learn?
      When will they ever learn…”

      Peter, Paul and Mary

      • BroKeeper

        🙂

  • Donald

    The report is absurd. None of the above mentioned renewable junk energy alternatives will replace the power station any time soon. Clearly the Edison Electric Institute is desperate for a buck.

    • Mop

      I feel it’s not junk at all. If the property is large enough, a business can throw up one or more wind turbines and they would only have to buy from the grid if wind isn’t blowing. That sounds like it would be annoying for the planning of the utility company but a good idea for the business.

    • GreenWin

      I agree with Donald, except the Edison Electric Inst. is the elected representative of the U.S. utilities industry.

      And central fossil power is exiting Germany ’cause PV/wind is replacing them.

    • fortyniner

      If I had to guess I would say that gas ‘fired’ fuel cells are probably the greatest hope for home power generation and heating, although of course technologies such as heat pumps may contribute. For DER, CHP installations using ‘conventional’ gas-fired power generation are probably most economic at present, the reduced efficiency of smaller plants being offset by district heating and the absence of power line losses. Most other ‘green’ technologies such as ‘biomass’ burning, methane-from-waste, biofuels etc. depend on fossil fuel availability for transport and processing, and are basically a dead loss driven by environmental fundamentalism.

      As far as grid power is concerned, it seems very doubtful that wind can make a subtantial contribution, although hideously expensive offshore wind farms may be an exception if costs are offset and underwritten by government. Solar power is useful but it seems unlikely that sufficient photovoltaics could be installed to replace fossil fuels, and without subsidies the economics are still dubious.

      At the moment only tidal power (lagoons, barrages and sea-bed turbines, NOT wave-driven generators) could rescue centralised generation – where this energy source is available (e.g., Scandinavia, UK, Denmark, Holland, France, Spain, Greece, etc.). It is currently the only non-fossil technology other than nuclear with the potential to generate multiple gigawatts per installation, and of course is ‘zero carbon’ – if you don’t count the gigawatt-hours of energy incorporated into the structures involved (i.e., using the same ‘energy audit’ as nuclear power stations).

      Of course cold fusion will hopefully enter he picture at some time in the future, but personally I am no longer perched on the edge of my chair…

  • sgt

    I live in a rural area in Virginia – lot’s of farms and a coop provides the electricity (mostly coal fired). With our tax dollars one of three large Dairy Farms put in a Methane generator system. More than enough power for the nearby town of aprox. 300 which is the county seat. It all went well until time to hook up. The power company forced the farmer to pay for a expensive hook up and monitoring system and when their system went on line they dropped his pay per KW from about $0.08 to $0.04. Needless to say they are going to court since the payback time for the dairy just doubled as well as one half profits were lost.
    I asked one of the coop employees about the situation and he said management was terrified the 2 other dairy’s would install systems and also that private users would put in their own solar or other types of systems. He said private systems would cause voltage regulation nightmares (voltage and frequency) as well as income loss.
    Bottom line – I do not doubt your article in the least.

    • Chris I

      You are talking about a very small, local grid, apparently unconnected to a wider nation one. This makes a mighty difference in the regulation nightmares they mention.

    • Iggy Dalrymple

      I recently chatted with an old medical doctor and I brought up the subject of new energy. He told me about a French doctor friend who was a child during the NAZI occupation. The Frenchman said that the Nazis confiscated all the petrol fuels and his family’s farm tractor was useless. He said his father rigged up methane production from the livestock manure and modified his tractor to run on it. He said their farm had the only working tractor in their province.

  • andreiko

    Is het RossiEffect 5e aggregatie-toestand waar energie uit vrijgemaakt kan worden?

    • andreiko

      Is the energy released from the 5th aggregatie_toestand Rossi Efect can be?

      • Barry

        I think it lost something in the translation.

        • Dickyaesta

          To say the least… 🙂 , toestand=situation