Policy & Planning Renewables

Utilities and the Distributed Energy Paradigm Shift

cleanerenergy.org 3 June 2013.

This is the second blog in a series on the growth of distributed energy in the U.S. The first, “The Calm before the Solar Storm,” was posted May 29.

In a move reminiscent of “Who Killed the Electric Car,” we’re hearing grumblings from the investor-owned utility (IOU) industry that advances in distributed energy technologies are threatening revenues. The IOU’s trade association, Edison Electric Institute (EEI), issued a red flag in January with a report titled: Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business. The “disruptions” boil down to distributed generation technologies like photovoltaics (PV), as well as energy efficiency and demand-side management programs, all of which are stealing demand and  revenue from utilities. EEI’s “strategic response” is to fight, rather than to adapt to, this evolving energy economy. While EEI is correct in raising a flag on these developing issues, the solutions they recommend are disconcerting from a public-interest standpoint, and naive from the perspective of maintaining competitiveness in an evolving market place. A more sophisticated response to the emerging market dynamics could create real economic value that can be shared by consumers, distributed energy providers and utilities…


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