It's been a year of dire warnings for utilities as rooftop solar has begun to compete with the traditional electricity system, but it's too early to start digging the grave for utilities, the CEO of Exelon Corp. said this afternoon at an appearance in Washington D.C.
"At this point in all of the evaluations that we continue to do, we cannot see an economic focused technology that will replace the scale and the economy of central-station power," Chris Crane said at a Resources for the Future lunch that was webcast live.
"The demise of central-station power and utility distribution systems is a little bit overstated at this point."
Energy industry observers have been anticipating a “death spiral” in which the utilities’ wealthiest customers adopt rooftop solar systems as solar drops in price. That shifts more of the burden of paying for grid infrastructure onto the utilities’ remaining customers, making solar more attractive to them as well. Increasingly, infrastructure costs shift to the poorest customers.
Crane called for developing a system "that enables distributed generation and supports it," but that also compensates utilities, and their shareholders, for their investment in the grid.
He revealed that Exelon is leaning against a suggestion by former Energy Secretary Steven Chu that utilities get into the rooftop solar business.
"In our markets we don't have the utility developing the distributed generation source. That's opened up to competition. We create the grid situation where they can sell that power back out onto the system."
"This is an Exelon opinion that's morphing," he added. "I think right now that's the opinion. I'm looking around at some Exelon eyes in the room to see if they're saying, 'You're crazy,' because that debate is not done yet."
Although Exelon has been a vocal opponent of wind subsidies, Crane called for cooperation between all energy businesses competing in the marketplace.
"So take it away from this polarizing debate--one's dead, the other one lives—to say, how do we work together over the next couple of decades as technology continues to change?"
For the time being, at least, renewables ensure a place for the traditional power grid, to bring distributed generation to market and to back it up when the wind falters and the sun doesn't shine.
"You're gong to back up renewables with a carbon based source," Crane said. 'There's no getting round it right now. Technology is not advanced to make a storage system that's economic that can take the renewables and hold them. Years coming that may be the fix, and then we would be a transition source."
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