Why decentralized electrical power has to win, no matter what Elon Musk says, and utilities are doomed


WhyDecentralizedPowerWins_2015-06-16_013348

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3 Responses to Why decentralized electrical power has to win, no matter what Elon Musk says, and utilities are doomed

  1. Ricardo Cruz says:

    Your statistic sounds like a non sequitur. Without more data, you could use that graphic to argue the other point: in favor of centralization. After all, does decentralization not reduce the economies of scale and increase ineficiencies?

  2. Ricardo Cruz says:

    Also, the potential energy in those forms of energy is very different upon conversion. In layman’s terms, you cannot turn on a lightbulb using natural gas.

    • Thanks for your comments.

      The present post was more in a response to comments which Elon Musk made, having less convincing argument for the general case why solar, in particular, and wind to some extent have to win. That argument is made more convincingly in a different blog post.

      The significant element in the graphic above is the Joule losses due to transmission. This is a part of the problem which fossil fuels have, which is that to get a Kilowatt-Hour (“kWh”) of energy to a consumer, energy is lost in extracting, purification (cleaning or refining), transport, burning, and then transmission. These overheads are seldom reflected in a head-to-head energy comparison of solar or wind against something like natural gas, which are generated nearby, at least in the decentralized model.

      The point is that the idea of applying “economies of scale” to electricity generation from fossil fuels always was fallacious. It’s just that people thought the loss of energy to support the network was acceptable. Now that there is a cost to doing that extra burning, in the form of greenhouse gas emissions, these “incidental expenditures” now matter a great deal. Demand-side solutions to consumption, whether of energy or of product, always have this great leverage in an economy which has long supply chains.

      It doesn’t matter how much energy per pound is in natural gas or petrol. Sunlight and wind are always there. Their marginal cost of production is zero. That’s why, in the limit, fossil fuels have to lose out. From the business case, solar in particular, because it is semiconductor-based, is riding the technology demand curve, and that is something which is very unusual for an energy source. See the above cited blog post, and my podcast on the matter, below

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