13% of Utilities Believe Centralized Electric Generation Will be Obsolete by 2050

February 27th, 2010 by Susan Kraemer

By 2050, 69% of utilities expect that a combination of central power stations in tandem with distributed renewable energy (typically rooftop solar PV and small wind) will supply most of the nation’s electricity, according to a survey by Black and Veatch.

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But a surprising 13% of utilities believe that an “Al Gore Electra-net” model of distributed rooftop power will be the dominant way we get our electricity in the US by 2050.

“Most of our respondents (69%) see a hybrid electric utility industry model embracing a combination of both central generation and distributed resources evolving by 2050. Such a system would include both centralized base-load generation and distributed renewable generation made feasible by advanced smart grid technology.”

Imagine if you believed your whole industry would be obsolete by 2050. That’s only forty years from now!

If you believed your industry would be gone in forty years, would you make long term capital investments in electric power generation? I sure wouldn’t. Expect more blackouts on the central grid as we get closer to the half-century!

What a surprising result from within the utility industry!

Indeed, quoting Black and Veatch “many cannot risk moving forward with major capital programs that are intended to meet current or future demand and/or replace generation assets that are beyond their service life.”

Now, that answer was in the context of uncertainty about carbon price regulations that might force them to add more renewable power – or whether those rules might be delayed.

But; given the 13% figure, perhaps the underlying realization that the Al Gore Electranet will be the dominant paradigm for electricity by 2050 is what’s really driving the reluctance to invest. Electricity is becoming more decentralized in this country: starting in California, yesterday.

Image: Black and Veatch

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