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Solar Is a Serious Threat to Electric Utilities

August 5, 2015 By Karen Henry

black veatch logoEighty percent of electric utilities believe distributed generation (DG), particularly solar photovoltaic (PV), is a serious challenge to their business, according to the 2015 Strategic Directions: US Electric Industry Report released by Black & Veatch.

The global engineering consulting company conducted an industry-wide survey from May 14 through June 5, 2015, to examine how electric utilities balance the intersecting interests of regulation and reliability with increased customer participation in the grid. More than 400 electric utility or electric industry stakeholders completed the online questionnaire.

Respondents listed balanced regulatory treatment between the utility and consumer, regulatory recognition and recovery of stranded costs associated with increased distributed energy resources (DER), formula rates and the unbundling of utility services and rates as the top regulatory practices required for their companies over the next five years.

Electric utilities said that renewables combined with battery storage will most affect their business. Nearly two-thirds of respondents said they plan to increase their use of data over the next two to three years to measure consumption behavior and other customer patterns.

According the report, confidence in the availability of low-cost natural gas remains high, with the majority of respondents indicating it will take market share away from higher cost nuclear and retiring coal assets.

While more than half of North American-based utilities reported that they are prepared to address the North American Electric Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) low-impact cybersecurity system requirements that are set to become effective in April 2016, more than 25 percent did not know how their utility was planning to manage the need for cybersecurity solutions.

One comment on “Solar Is a Serious Threat to Electric Utilities

  1. The report seems to use “challenge” and “threat” interchangeably, yet the terms have very different meanings.

    Read through the report to find:
    * Only a third of utilities rank solar as even a moderate threat or above.
    * Three-fourths of utilities consider DG infrastructure to be an investment opportunity.

    Read through all 45 pages and come to your own conclusion. My takeaway was that utilities are looking at ways to maintain a lucrative business model. That sounds like every industry.

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