NRG, a major US electricity generation company, has decided to skip the middle man, and sell distributed generation capacity directly to electricity users. Here is the story from Bloomberg.
Bypassing its utility clients, NRG is installing solar panels on rooftops of homes and businesses and in the future will offer natural gas-fired generators to customers to kick in when the sun goes down, Chief Executive Officer David Crane said in an interview.
NRG is the first operator of traditional, large-scale power plants to branch into running mini-generation systems that run a single building. The endeavor strikes at the core business of utilities that have earned money from making and delivering electricity ever since Thomas Edison flipped the switch on the first investor-owned power plant in Manhattan in 1882.
This is a very strong combination of low cost and reliability. If NRG can pull it off, this new system will revolutionize the electric power industry in the US.
Consumers are realizing “they don’t need the power industry at all,” Crane, 54, said in an interview at this year’s MIT Energy Conference in Cambridge, Massachusetts. “That is ultimately where big parts of the country go.”
This new development will leave WV in the dust if our state’s politicians and regulators continue dancing to the tune of big coal-fired generators and WV’s power monopolies. In particular, WV continues to block open access of small power generators to the grid. It is not clear at all whether individual home or business owners would be able to sell electricity using power purchase agreements to any businesses other than WV’s Ohio-based power companies.
Why let power companies dictate how much (or how little) of your power comes from the sun? Why rely on power companies’ obsolete centralized grid with its vulnerable above ground wires when you can get your own natural gas from a completely underground infrastructure?
The Bloomberg story fails to note whether storage batteries are part of the NRG system. If NRG does not include battery storage, then its systems will not optimize the use of the zero marginal cost solar power that the system produces. And, while many natural gas generation technologies can be scaled to be very small without losing economies of scale, there is no mention in the story of what would happen to these hybrid systems if gas prices continue to rise from their current low levels.
Distributed generation is coming, but WV’s policy makers continue to do nothing. The rest of the country is passing us by.
As the old song says, “the company got the coal, all we got was the shaft.”