Will Our Electrical Power Utilities Remain Relevant?

Here’s a Business Week article whose point is that the relevance of our power utilities is disappearing.  Not true.  Unless there is a breakthrough in energy of unprecedented proportion, along the lines of cold fusion or something else that appears equally unlikely at this point, our electrical utilities will continue to play a critical role in our lives, largely because of the issue of scale.

Absent a miracle, despite the claims of certain pundits, energy will not become “too cheap to meter.”  For example, with further advancements in technology, we can get PV down to $1 per Watt.  Can we get it to $0.10 per Watt – where we no longer have to think about the economics?  Nope. 

Let’s be realistic, and look at the basic facts of energy and money: regardless of how low the cost of renewables becomes, say solar PV or wind, using a centralized model for power generation will remain the dominant model, due to the sheer economy of scale.

So,  if you agree that the cost of energy can be counted on to be significant, let’s talk more about this.  Consider for a moment that the area you have on the roof of your suburban home or office building, when covered in PV, barely provides for your energy use.  Then remind yourself that the large and ever-growing number of people living in urban areas have a minuscule fraction of that quotient of energy/sun-exposed area.  Essentially regardless of the direction that the forms of energy generation take, we need entities that use regions of otherwise low-value real estate to generate energy and transmit/distribute it to us.

I’ve been to the great deserts of the U.S. southwest, where the sun shines 350 days a year, but I don’t want to live there.  I’ve been to Tehachapi, one of the world’s great wind resources.  Land is cheap, and the wind blows like nowhere you can imagine.  But there is a reason that the land is cheap: no one wants to live in 24/7 gale-force winds.

The concept of asking a certain entity to go out and get us cheap energy (and soon, cheap and clean) is not going away.