Already feeling the pinch of lower demand due in part to solar power uptake and energy efficiency, conventional U.S. electricity generators could be facing an additional USD $2 billion loss of revenue starting in a few years.
According to an article on Bloomberg, grid managers serving the eastern U.S. plan to reduce expenditure on electricity purchases from conventional generators by approximately 1,400 megawatts – enough to fully power 780,000 households – starting in 2019.
The Bloomberg news item draws on a report by power industry consultant ICF International Inc.
In 2015, revenue from electricity sales in the U.S. fell 1.3 percent to $388.1 billion and almost 18,000 megawatts of conventional generation was retired. However, 7,286MW of solar PV was installed across the nation last year – the largest annual total ever.
A predicted 16 gigawatts of capacity – around 61.5 million solar panels – will be installed in the U.S. this year; representing year-over-year growth of 119%.
By 2021, the U.S. solar market may eclipse a cumulative total of 100 GW, with an annual installation rate of 20 GW or more. While a significant chunk of this activity will be focused on utility-scale, residential PV will certainly continue to make its presence felt.
If the grids decide to factor in power from rooftop solar power systems in the future, it would constitute “a double punch on the conventional power plants,” says George Katsigiannakis, a principal at ICF.
Mr. Katsigiannakis also cautioned that too much reliance on solar may result in an unstable grid – a point of view that some may argue against; particularly with the energy storage revolution moving along at a fairly rapid clip.
And on that topic, in January ICF also flagged that it was time for utilities to get cracking on addressing the impacts of energy storage.
“The critical question is no longer whether storage on the distribution and customer side of the grid is going to fulfill its promise,” states a white paper from the firm.
“Rather, our industry needs to begin to shift the debate away from the potential and focus on the longer view questions of ownership and placement of the systems.”
That white paper, Utilities and Storage: Will Optimizing on Resiliency Pull Storage Back from the Edge of the Grid?, can be downloaded here.
The writing on the wall regarding losses mounting for conventional electricity generators has been visible for some time. Last year, a report by Rocky Mountain Institute (RMI) said customer load defection could erode utility annual energy sales in north-east USA by as much as ~10–20% in 2020, jumping to as much as ~50–60% by 2030.