Dive Brief:
- In a few years, most power will come from distributed sources and the centralized power grid will become a "last resort," according to David Crane, NRG Energy's president and CEO.
- Utility power sales have entered an “inexorable decline,” the "massive excess capacity" needed to meet peak demand "will become unnecessary" and the need for new power plants and transmission infrastructure "will be eliminated," Crane posits.
- Crane says three trends will lead consumers to stop buying power from utilities: cheap rooftop solar, automated conservation and extreme weather.
- But Crane sees a possible compromise between utilities and their customers on solar. Utilities should buy back excess supply that coincides with peak use, instead of offering average power supply costs, Crane said. Solar customers should pay for grid use at night or on cloudy days.
Dive Insight:
“Societal trends, including stagnant population growth levels, consumption crowdsourcing, and a greater commitment to sustainable lifestyles, will accelerate the pace of demand destruction in the energy industry,” Crane said.
“We don’t know which companies will helm the future of the electricity industry,” he said. “However, the only thing I am sure of is that our sector can no longer defend the status quo. Put simply, we can’t act like utility companies anymore.”
Thus endeth the lesson, according to Crane. Class dismissed.
