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Why Elon Musk's Batteries Frighten Electric Companies
JoeyRox writes: The publicized goal of Tesla's "gigafactory" is to make electric cars more affordable. However, that benefit may soon be eclipsed by the gigafactory's impact on roof-top solar power storage costs, putting the business model of utilities in peril. "The mortal threat that ever cheaper on-site renewables pose" comes from systems that include storage, said physicist Amory Lovins. "That is an unregulated product you can buy at Home Depot that leaves the old business model with no place to hide."
How much money they spend on protecting their status quo.
Electric utilities would in fact love local storage for solar rooftops. The big technical problem for them is that when a cloud goes over an area, all the electricty being pumped back into the grid suddenly drops drastically and the power company has to have generation capacity to add in within seconds to avoid brown outs. By having even 30 minutes worth of storage in the home, the batteries could fill in for the local drop and ease the imapct on the power company.
This is becoming a very big problem in Germany now and there are companies whose sole business is to supply incredibly expensive (thousands of dollars per kilowatt hour in some cases) electricity within a few seconds notice. I believe there was even a bloomberg article on this a few months ago.
Apart from the handful of nukes and hydro installs, the electric companies are a segment of the fossil fuel industry.
You're looking for quotes? See my journal.
My public utility is totally behind renewables and if they could reduce the demand from the community they would.
They are "greenies," as are most Americans.
So both the claim that utilities are scared, and the claim that greenies think they are scared, these are both dubious to me.
Demand won't actually shrink, growth will flatten. Greedy companies will freak out, public utilities will breath a sigh of relief.
As I understand it, most of the power company's objections to solar is being forced to buy the power back and subsidize it.
Maintaining the lines to your house is a fixed cost and they are recovering that cost using amortization over periodic billing based on usage. People who go solar are essentially the freeloaders in this system as they pay less of the overhead for the amount of transmission service they receive. This is not unlike the gasoline tax for highway funding debate or numerous other situations.
Governments tend to attempt to make things simpler for consumers by mandating "tariffed" service to avoid "skimming" by the providers. Unfortunately that generally doesn't work as governments generally attempt to use these regulations for subsidizing service for some by burdening others and the companies just get smarter about skimming. Unfortunately, some customers discover the workarounds to freeload for a while (e.g., internet VoIP w/o universal service fund fees, or solar panels with forced power buyback, or electric cars that pay no gas tax). They claim their microeconomic observation about their freeloading is the new economic reality and people should just wake up and smell the coffee.
Unfortunately, when there are too many freeloaders them, then the model just breaks down and need to be fixed so that more people pay full freight. Often, the freeloaders then discover that paying full freight isn't makes the it much less attractive (but at least they got theirs whilst the getting was good). The result is generally simply a different reality than the previous, but generally not much different.
For example, the power company would much rather demand be totally flat. Provisioning for more power is a big capital cost (building power plants, increasing transmission capacity, etc.) that they can only recover by amortization. This is the reality that the power companies lived in the 80's with nuclear power decommissioning. Sadly, we have a big nasty habit of kicking the can down the road on these things...
At least when you collect a welfare check directly from the government you are being honest with yourself...