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I agree in the long term (50 years) that is true, but in the medium term (15 years) solar + storage might be moving faster than utility companies want. If you b

I agree in the long term (50 years) that is true, but in the medium term (15 years) solar + storage might be moving faster than utility companies want. If you built a power plant with a 40 year lifespan in the year 2000, you would not be happy if peak demand is lower than expected in 2025. I would not expect the utility companies to be allies in this transition period to clean energy. It requires major capital outlays from them, it invalidates previous investments that have not fully depreciated, and in the end they will probably make less money. This is not to throw a wet blanket on solar and storage, I just think we need to be cognizant of the idea that in all likelihood utility companies are both required to change for this whole thing to work and will be very resistant to that change. There might need to be changes to incentives or regulation to get the utility companies moving in the right direction faster.

fancyketchup 11y ago
That doesn't really make sense. Electric utilities require capital investment proportional to peak usage, but only earn returns on average usage. This will only increase the ROIC of an electric utility by reducing the peak:average ratio. Additionally, electric utilities are in a constant cycle of capacity upgrades to keep up with increasing demand. Customers adding distributed storage allows utilities to delay capital investment (which makes the company look better in the near-term).
- hyperpape 11y ago
  I think they're saying that the investment in peak capacity may be already made, whereas the returns on use are ongoing, so creating incentives to save electricity may not be valuable to the companies. Don't know if that's their actual cost-structure, but it's plausible in the abstract.
- danmaz74 11y ago
  > but only earn returns on average usage Not if the price they sell at is different at different hours.

fancyketchup 11y ago

That doesn't really make sense. Electric utilities require capital investment proportional to peak usage, but only earn returns on average usage. This will only increase the ROIC of an electric utility by reducing the peak:average ratio. Additionally, electric utilities are in a constant cycle of capacity upgrades to keep up with increasing demand. Customers adding distributed storage allows utilities to delay capital investment (which makes the company look better in the near-term).

hyperpape 11y ago
I think they're saying that the investment in peak capacity may be already made, whereas the returns on use are ongoing, so creating incentives to save electricity may not be valuable to the companies. Don't know if that's their actual cost-structure, but it's plausible in the abstract.
danmaz74 11y ago
> but only earn returns on average usage Not if the price they sell at is different at different hours.