US Companies Going Off-Grid
At least in principle. I doubt many of them will actually unplug themselves from the grid. The Wall Street Journal article Companies Unplug from the Electric Grid describes the US companies that are moving to produce their own electricity. The graphic is taken from the article and shows the companies already using distributed generation. The fact that Walmart is number one really says something about the business case for distributed generation because it doesn't do anything unless it boosts the bottom line.
Companies installing distributed generation is just one piece in the "utility death spiral", a term I find rather humorous that gets at the slippery slope utilities are currently on. Utilities revenue stream is variable and depends on how much electricity they sell. Their costs on the other hand are fairly constant and come from the construction and maintenance of the grid. These costs are spread across their customer base.
As more customers go "off-grid" or at least start producing their own electricity, the utilities sell less electricity and thus their revenues decrease. To compensate for this decrease in the volume of electricity, they must increase their rates. This rate increase then makes it more attractive for consumers to produce their own electricity. As the volume continues decreasing, the rates go up, and as the volume decreases.... hence the term"death spiral".
One of the interesting parts of the article was the comments made by existing utilities like Edison International and America Electric Power that see the writing on the wall and are considering or, as in Edison's case, actively getting involved in companies providing distributed generation technologies to customers.
This swallowing of the poison may be the best and only option to deal with "death spiral". It is impossible to say if the utility death spiral will actually happen to the extent that "death spiral" suggests. There is a lot of value in having a grid and unless firms have batteries or natural/bio gas generators onsite, there needs to be some backup power supply when the clouds roll in. However, when big customers like Walmart start producing most of their own electricity, something has to give.
The article should be the top link in the search. It's the only way to backdoor the WSJ website.
https://www.google.com/search?q=companies+unplug+from+the+grid&oq=companies&aqs=chrome.1.69i57j69i59j0j69i60j69i61j0.4232j0&sourceid=chrome&ie=UTF-8
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| Source: Companies Unplug from the Electric Grid. Web. 18 Sept 13. |
Companies installing distributed generation is just one piece in the "utility death spiral", a term I find rather humorous that gets at the slippery slope utilities are currently on. Utilities revenue stream is variable and depends on how much electricity they sell. Their costs on the other hand are fairly constant and come from the construction and maintenance of the grid. These costs are spread across their customer base.
As more customers go "off-grid" or at least start producing their own electricity, the utilities sell less electricity and thus their revenues decrease. To compensate for this decrease in the volume of electricity, they must increase their rates. This rate increase then makes it more attractive for consumers to produce their own electricity. As the volume continues decreasing, the rates go up, and as the volume decreases.... hence the term"death spiral".
One of the interesting parts of the article was the comments made by existing utilities like Edison International and America Electric Power that see the writing on the wall and are considering or, as in Edison's case, actively getting involved in companies providing distributed generation technologies to customers.
This swallowing of the poison may be the best and only option to deal with "death spiral". It is impossible to say if the utility death spiral will actually happen to the extent that "death spiral" suggests. There is a lot of value in having a grid and unless firms have batteries or natural/bio gas generators onsite, there needs to be some backup power supply when the clouds roll in. However, when big customers like Walmart start producing most of their own electricity, something has to give.
The article should be the top link in the search. It's the only way to backdoor the WSJ website.
https://www.google.com/search?q=companies+unplug+from+the+grid&oq=companies&aqs=chrome.1.69i57j69i59j0j69i60j69i61j0.4232j0&sourceid=chrome&ie=UTF-8
