Why ‘God parity’ will be the end of centralised generation

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Ever heard of the expression “grid parity”? It’s the term coined to describe the point when electricity generated from rooftop solar panels is cheaper than power purchased from the grid.

In Australia, it occurred in around 2012, and now the cost of solar has continued to fall so quickly that the cost of solar generation is probably little more than one-third of the cost of grid power.

Grid parity is seen to be highly disruptive because of the changes it causes to the energy industry, and the sudden empowerment of customers who are no longer just consumers, but pro-sumers. They don’t just have parity with the grid, but increasingly parity with the power companies themselves.

It turns out that grid parity may be the least of the problems facing utilities. Now we have “god parity” – when the cost of electricity generation falls below that of the cost of the network. As we noted in our piece for The Guardian last year, and for RenewEconomy, it means that even if the cost of coal-fired, gas-fired or nuclear generation (or, for that matter, utility-scale solar or wind) were free, it would be too expensive to compete with solar.

As Charles Yonts, an energy analyst with Hong Kong-based CLSA notes in a new report, this is bad news for centralised generation. It’s also bad news for conventional utilities.

“In this new world, baseload power (ie the stuff that we have all relied on for most of the time for our entire lives) will be like needing a mainframe,” Yonts writes.

“There will have to be some large generation systems, just like big data centres today, but most generation and storage will be distributed.

“This lends itself to further analogies with the internet – an Internet of Energy … Just like we upload / download data now, we will upload/download energy; a transactive economy.”


Australia, as we know, is the proverbial canary in the coal-mine on this issue. Solar generation costs are about 10-13c/kWh, below what most customers pay for network costs. As battery storage costs come down further, it will be inexpensive enough for millions to potentially get off the grid and/or build microgrids.

Yonts’ source for these forecasts is Tony Seba, the Stanford University academic who predicts that Silicon Valley will make oil, nuclear, natural gas, coal, electric utilities and conventional cars obsolete by 2030. Seba expanded on the “God Parity” theory in a blog last year.

“By 2020, rooftop solar in sunny areas like the US Southwest will generate electricity onsite at less than the cost of transmission and distribution.

“This bears repeating, a house, a business, or a Big Box store in Los Angeles, CA, or Phoenix, AZ, will generate solar for less than what their centralized generation utilities charge the ratepayer for transmission and distribution costs. This means that it won’t matter how much these conventional generation facilities cost.

“The cost of generation plus the network (transmission and distribution) will be more expensive than onsite solar generation. How many utility executives are losing sleep over Walmart generating its own solar electricity, let alone getting into the electricity retail business?

“Even if the utilities miraculously invented a new technology that used the ‘God Particle’ to generate electricity at a cost of zero  (remember the nuclear promises of ‘too cheap to meter’?) they will not be able to compete with solar self-generation.

When the cost of the network (transmission and distribution) is higher than the cost of rooftop solar generation the market will hit “God Parity”.

At this point, Seba says, centralised generation will not have a business model, and most utility-scale generation assets will be stranded.

This, Seba says, will start happening around 2020. Of course, it is already happening in Australia, and Seba’s prediction of how the utilities will respond is instructive.

“The only way utilities might even stay alive after that is to work through the regulatory system to maximize short-term cash flow at the expense of ratepayers,” he says.

And guess what, that is exactly what is happening in Australia. As we reported earlier this month, the utilities lobby is proposing to change depreciation rules that would allow them to recoup their investment more quickly than they do now, and hit consumers with the extra costs. The alternative, they say, is to charge all users for the grid even if they are not connected. Even the utilities lobby admits this is not practical, and not fair.

Seba goes on: “Utilities may not like distributed solar, but they will sure try to make money from this exponentially growing market without investing a single dime. Solar taxes, anyone?”

Hey presto, that is what is happening now. In Spain, it is flagrant, in Australia slightly more subtle – extra network charges for households with solar being just the start.

The problem comes down to the inability of these massive businesses to deal with a new business model. Like the arrival of digital photography, established businesses don’t know how to react when the marginal cost of production is zero.

Kodak found this a decade ago. It failed not because it did not develop digital photography, it did. As Yonts notes, Kodak got killed because it didn’t realise the marginal cost of digital imaging was zero, and they wanted to grab a slice of each photo – but that was a slice of zero.

The new (digital imaging) paradigm required new business models. So does energy generation, because the marginal cost of generating electricity from solar and wind turbines is also, effectively, zero.

Like the digital camera, and PCs and mobile phones, established technologies are being “disrupted from below” by products that were once dismissed as toys, but have improved at a fast rate.  

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  • Reality Bites

    It’s only a flesh wound….

    • Chris Fraser

      Come on i’ll bite your legs off …

  • john

    So because power from PV is about 10-13c/kWh there is no way to stop this uptake?
    Yes there is.
    Use a supply charge per day and very low usage charge, or a demand charge then pay very little for power exported.
    Better still limit the size of the kind of export unit so it is pointless.
    Put in place a penalty for connection to the network.
    Just charge a cost against any one who has a supply going past their allotment.
    For some they will be able to just leave but for the majority the above range of mitigating costs from the suppliers will work and are being put in place.
    Power once was a service now it is a business and as a business you look after your bottom line by what ever method is best for you.

    • juxx0r

      I don’t know why the hell anyone would be connected to the grid, Diesel has now dropped below grid parity.

      The grid has priced itself out of the market.

      • Mike Shurtleff

        Diesel? No, still one of the most expensive ways to generate electricity.
        More so for distributed generation.

        • juxx0r

          Have you priced it lately?

          • mick

            doesn’t matter what it costs hardly use it

          • juxx0r

            In a discussion about the costs of power, the cost matters.

          • mick

            I reckon people miss the point about gennies you set up so theres only occasional use then either flog some from the tractor refuel point or next time you go to town throw a 44 in the ute

          • So please enlighten us. What is the current cost of diesel for stationary generation in Australia?

          • juxx0r

            24-28c/kWh All in.

          • sean

            got some maths to back that up?

            if this is true this should be front page news.

          • Mike Shurtleff

            24-28c/kWh in areas where you have easy access to diesel. Remote areas in India and Africa, islands (eg Hawaiian Islands), it is more.

            Doesn’t matter. Solar PV is already half the cost you give in many areas, so you’d want to use during the day already. Battery Storage has started to fall in cost significantly and is going to plummet by 2020. Solar PV and Storage costs are still going down. Oil (diesel) costs are still subject to global supply issues and will not go below what they are now for any appreciable time. (We’ve past peak in easy oil. It costs more now and this is not going to improve much more than it just did.) Smart bet is going to be Solar PV + Storage going forward in areas with reasonable solar resource.

            1.5 million homes have Solar PV now in Australia. Tony Abbott and cronies are painting themselves into a corner by supporting FF. In Hawaii (major canary for Diesel vs Solar PV) the politics have shifted heavily in favor of Solar PV. They get it! It’s done! You’re off on your math, particularly wrt smart betting on trends going forward.

          • Mike Shurtleff

            Cost of diesel generation was so high as to be economically unsupportable by most when it was $100/barrel for oil. Now it is between $40/barrel and $50/barrel. It is still more expensive than Solar PV in sunny areas, particularly remote sunny areas. Very low-cost Storage is now coming to the market. Both Solar PV and Storage are still dropping significantly in cost. The choice is very clear …if you have good solar resources. Some areas in Alaska it might be different. Bummer for them.

            How much diesel electricity is used in the US? Almost none since 20 to 30 year transition away from oil for electricity that started in the 1970s. Why? Oil (deisel) generated electricity was too expensive. …and this all happened before we bypassed the peak in easy oil. Fracked wells don’t produce for very long and fracking is mostly non-viable economically below $60/barrel (very roughly). Did you notice the Saudis shut us down in the US with $50/barrel oil? …and in two years when those fracked wells start to play out? …then the Saudis can increase their prices some again.

            Diesel cost too much back then. It certainly isn’t a good way to generate electricity now.

          • Mike Dill

            I just did the calculations for a diesel back-up generator. The worst case was me needing 3kw per hour, but the larger generators were more efficient. The generators that I looked at used about 1 to 2 liters per hour. So a Kwh would cost me nearly a dollar. Sounds horrible until I figured out that I would only need about 80 hours a year to get off the grid with storage.

      • john

        I very much doubt that
        Diesel powered gen would be at least 20 to 45 cents a kwh
        I can not see that being in any way a competitor in any market

    • Catprog

      Most of those will only drive people to disconnect from the grid driving prices up for everyone else.

      The only one that works is the mandatory cost.

  • Ken Fabian

    There are some reasons to retain a grid but a reasoned approach to pricing grid access as backup to PV and PV + Storage fitted homes and businesses is needed – including broad inclusion of emissions considerations of every kWhr. As storage becomes mainstream the situation will change but making intelligent use of existing plant in an increasingly (decreasingly?) intermittent role as backup makes some sense to me. Ultimately the cost advantages for storage at grid scale may overshadow the advantages of household ‘islanding’. And then there is supply for industry and transport.

    • Mike Shurtleff

      The grid will still be advantageous in some areas. In many sunny areas it may not. If I can generate and store my own power, then the only reason I might need the grid would be to sell power. Somebody has to make it worth my while. THEY have to pay for my grid connection. THEY have to pay me something for my power output. Maybe I live too far away. Maybe they can buy power at a lower cost from closer in. It is going to be different and the grid is probably going to go away in some places.

      • Billy Banegas

        I agree. Now the grid acts as the battery in most cases, but in the future the power companies will need to buy my excess power to sell to industries that need large amounts. Cheap batteries are going to be a key for all concerned.

    • john

      Ken you have summed it up well said.

    • Actually thoughtful

      Utilities need to switch to a low monthly fee for providing backup, pay providers $.04 per kWh, and charge $.05 for reselling that to someone who needs it. The days of endless profit for utilities are over (thank God).

  • Jon

    Centralised energy may be dead, but the “Internet of Energy” only works with a network.

  • Paul

    It seems that the businesses that consume more energy than they can generate onsite are in strife. Unfortunately they provide jobs so people can sit back happy with the cost savings of being “off grid” but they may be unemployed.

    • Mike Shurtleff

      Why? They will be able to buy power from prosumers near by …for less.

      • Paul

        Using a network that has failed?

        • nakedChimp

          Using a smaller network that doesn’t deliver power over hundreds of kilometers if nearby production can cover local use..

        • Mike Shurtleff

          Micro-grid, but grid will still be used in areas where it is needed. If you have an area of high energy use, without adequate on-site solar resource, then they’ll still need to support access of electrical power from somewhere else, be it nearby or far. Best economics will determine the solution.

          Grid of future:
          (a) No grid in areas where off-grid solar resource (and/or wind resource) is sufficient.
          (b) Micro-grid in areas where solar (and/or wind) resource in nearby area is needed by a small business group, community, or town.
          (c) Same old grid with more RE on it, in areas where off-grid and micro-grid still don’t cut it.

          It’s not going to be one of these. It’s going to be all of these …depending on what is needed for the particular area and particular electricity requirement.

          • hydrophilia

            As more peak grid loads are reduced by on-site generation and load-leveling storage, the smaller the required grid and the less maintenance required. We don’t need the gold-plated super grid they want us to pay for… and especially the additional proposed upgrades!… but a lightweight grid that helps microgrids and prosumers balance their small surpluses and deficits could be very welcome and cost-effective, at least for a while.

  • dhw

    Paul and Ken are awake. Grid desertion is a very romantic and exciting thing for individuals but not a great from an economic, social and political perspective when you have a system wide look and consider the customers for whom it doesn’t suit. Ramping up fixed charges relative to energy charges is not an aggressive move of protection it’s a removal of an immense price distortion that gave rise to this problem. This discussion will be mute if/when truly cost reflective pricing is rolled out, at that point people can leave the grid without other users having to pay for it. Storage will make broad economic sense when it makes sense at a network level.

    • juxx0r

      The discussion will be mute if it carries on silently with sign language.

    • nakedChimp

      I’m pretty sure the subsidized network costs in my neck of the Australian woods will be too much for me if I have to carry them alone, so I will defect as soon as possible – as will everybody else out here.

    • Ken Fabian

      dhw – I have to disagree; I think ramping up fixed charges actually is an aggressive defense from an industry up against what was until only very recently considered an unthinkable impossibility ie rooftop solar that is, intermittently and on average, cheaper than what the retail grid provides.

      A lot of companies only recently bought sold off public assets, with assumptions of buying a sure thing. But solar being intermittently cheaper in an open market will force centralised generation into intermittency in response and true cost reflective pricing – ie time of use pricing – will see costs for supply outside the sunny daytime rise; the evening peak will be more expensive and that will incentivise storage.

      It won’t be storage capable of taking solar homes off-grid at first, it will be just enough to carry them through that peak following a sunny daytime, to extend self supply. More time off-line and higher costs for supply during overcast conditions will result and that will add more incentive for more storage beyond that. It should have been foreseeable* and been a clear incentive for those companies to invest in large scale storage, not reason for punitive pricing for customers who invest in solar and storage.

      Sure, it’s disruptive to the businesses running power stations they presumed could run on a steady basis with a captive customer base – change generally is disruptive – but is that something the solar and storage owners should be held responsible for and be required compensate those businesses so real costs don’t have to be passed on to their customers? I don’t think it is. If energy ‘poverty’ is an issue, that’s for government policy to face squarely – targeted welfare or solar subsidies or efficiency and insulation schemes perhaps?

      “Fixing” the market in favour of encumbent centralised generation by forcing solar owners to pay a premium so that those businesses don’t have to adapt and change or pass on the real costs of change to their customers won’t work; that only adds incentive for solar fitted customers to go off-grid.

      Think of it as a defacto carbon price, imposed by market forces.

      *(edit – perhaps not fair to expect them to have foreseen the rapid price drops for PV when no-one else did. It is fair to condemn their heels dug in resistance to a low emissions transition and use of influence with governments to avoid climate responsibility.)

    • Mike Shurtleff

      “Ramping up fixed charges relative to energy charges is not an aggressive move of protection it’s a removal of an immense price distortion that gave rise to this problem.”
      Dream on. It’s an incorrect and unfair response to the problem. It won’t last.
      Next is taxation to pay for the grid whether you use it, or not, i.e. taxation without representation. In the US? No. In Australia? No. Watch the politics in Australia.

      “This discussion will be mute if/when truly cost reflective pricing is rolled out, at that point people can leave the grid without other users having to pay for it.”
      This discussion IS mote. People can and should be able to leave the grid if they want to. There are solutions now other than “what we have used for the century”. See comment below on future grid.

      “Storage will make broad economic sense when it makes sense at a network level.”
      This is a tell. It shows you are locked onto the idea of the grid as it’s always been for whatever reason, paradigm thinking. Storage is starting to make broad economic sense now and this is going to accelerate rapidly, because the technological capability for lower cost is there now and the competition is already fierce. Storage makes the most sense BOTH at the source of use AND at the source of supply, when the grid is used. I’ve read this multiple times from a number of sources and it makes sense when you think about DG, load leveling, and reducing grid transmission levels.
      btw The larger demand is very clearly for end-of-grid storage. There’s a neon sign saying this, which was the Tesla battery storage offer and the huge number of reservations they got in a very short time. …and their prices are not really that low …compared to what is coming.

      • BarleySinger

        large corporations and energy utilities are ALREADY putting battery banks on their grids & buildings … to help equalize generation and use (and to store energy which they bought at a low price, for later use) .

        This will become far more common. It is likely that all large grid substations will have batteries to help handle peak usage, when generation is lower.

        I expect that in future, the big buildings (many of which already have generators in them) will have battery banks too.

        Incidentally, on tall buildings, elevator shafts (just because they exist) generate winds from in excess of 150 kph (easily). Stuck elevators in the shaft cause “hurricane winds” in the offices. Anyone out there thought about the OBVIOUS…putting wind generation on the tops of sky scrapers, and using “shafts similar to elevators” to get some wind energy?

  • Rob S

    Interesting…so what happens to the wind and solar farms when the cost of the network (transmission and distribution) is higher than the cost of rooftop solar generation?

    • Math Geurts

      That is the wrong question. The good question is: what will happen if the year around costs of a fully disconnected (rooftop solar or other) power supply system will be lower than the cost of solar farms plus distribution systems.

      • Rob S

        I don’t see it as the wrong question…the article title is “Why ‘God parity’ will be the end of centralised generation”…solar and wind farms are part of centralised generation.. if the article is correct in what will happen then that would also mean the death of these generators as the cost of transmission and distribution is greater than solar PV.

        • Math Geurts

          Rooftop generation is very easy, but a disconnected solar panel + inverter as such is not able to deliver 24/7/365, and that’s what everybody wants. You will need p.e. individual storage. Solar farms, as part of of distribution systems, deliver 24/7/365, but also distribtion systems are not for free. It is not easy for an individual system to beat the price of a collective system unless you live very remote. Or if the governement taxes the collective system but not the individual system. What is the sense of taxing solar farms and not taxing rooftop solar?

    • nakedChimp

      Won’t affect all places equally.. some users of energy won’t be able to harvest enough electricity locally. They will pay for those, they have to.

  • Peter Campbell

    Our household is reasonably energy efficient. We have three adults and consume less electricity that a typical one person household, according to our electricity bills. Our 1.8kW PV system occupies half of our available roof space and half of the rest is occupied by a solar hot water system. We don’t have much roof space left to add much more PV. By chance it works out nicely that our PV system generates about the same amount across the year as we consume for our electric cars. Alternatively, it produces about the same as we use in the house in summer (not counting the cars) and about half what we use in winter (not counting the cars). All in all, I don’t see much prospect for generating as much electricity off our roof as we use for our household and transport purposes, even if we had perfect storage.

    • Andy

      your neighbour will have more roofspace or someone further down the road and generate the energy for you. This is what makes micro-grids so interesting…

      • BarleySinger

        You could also (feasibly) put PV on the north SIDE of your house. Got any exposed walls on the north side of that house? The south edge of your roof COULD have a 30 odd degree tilt of PV mounted near its edge (supported by diagonal struts off of the south wall).

        Think of those automatic shutters that keep out the sun…not put solar PV on them (somebody is going to do this).

  • Math Geurts

    The unevitable conclusion has to be that in the near future the price for connecting to the grid has to be fully fixed, i.e. independent of the hours per year you use it. If you want to leave the grid (because the costs of rooftop solar plus year around costs for individual storage or back-up are lower): do it. If you don’t want to leave to grid: don’t cry about that price.

    However if, like it is the case in Spain, a government decides to introduce a levy or tax related to the consumption of electricity there is no reason to exempt homebrew power from that levy.

    • nakedChimp

      that won’t fly.. taxing the power you use, no matter from what.

    • Mike Dill

      the idea floated in Spain was a tax on connected systems. The answer was to
      disconnect the systems from the grid (turn them into micro-grids). The idea died (for now).

  • Neil Frost

    1: Make power cost around what it does now.
    2: give me back the power I give to the grid free.
    3: keep what I don’t use as a gift. (I don’t need it)
    4: charge me what it would cost for battery backup and a generation for backup spread over the life of battery’s ( batteries to store power $2000 over 10 years) I see that as the price in a few years.
    A new generator every 10 years. Around the same.
    Let’s throw a bit in and make it $5000 in 10 years.
    That’s $500 a year for grid connection a year.

    That way I don’t need to worry about being ripped off.
    I don’t need to worry about battery failure.
    I don’t need to worry about generator maintenance.
    Sure profits will be different for power companies
    I do see a growing demand for electric cars / bikes and without local charging stations people will want to charge them at home. Not many people will have the room for the amount of PV needed especially if it is Mum. Dad. A few kids all with a car of there own.

    I want to see what it will look like in a few years time. I don’t see this happen to far off.

  • nakedChimp

    When does silicon valley make centralized government obsolete please?
    Or centralized money for that matter?

    • Mike Dill

      Centralized government as currently practiced is obsolete.If you want a democracy, have all the bills available to vote on the internet. Done.

    • mick

      I thought we were there, corporations running governments,setting policies etc I wouldn’t expect cash to be around for much longer noticed govt trying to kill off bartering and the black economy?

      • nakedChimp

        Your reply reminds me of the phrase ‘be careful what you wish for’.. very appreciated 🙂

        • mick

          I hadn’t thought of it that way but fair cop mate

    • BarleySinger

      When will centralized money obsolete? Well decentralized virtual currency EXISTS now.

      Ever hear of BitCoin? It’s a a decentralized virtual currency. It is not yet as stable as national currencies (goes up and down … a bit more like gold or some other commodity. Spain is putting up 10,000 Bitcoin capable ATMs. A Singapore company created a way for customers to buy gold and silver directly from a Lamassu bitcoin ATM. There are quite a few “virtual currencies” now days.

      This link will give you the current conversion rates on four virtual currencies (including BITCOIN).

      Money is worth something because people believe it us. 100 years ago, gold had no use aside from prestige jewellery (decoration). Gold only had value because of the “consensual reality” created by people ACTING as if it was worth something.

      • nakedChimp

        You’re right.. I will have to look at those again and see what they are like as I have a certain expectation/theory I hang on to in regards to this (which I hope is being tested by mankind at some point) if we want to get ahead with the evolution of trade.

  • George Michaelson

    The “cost” of power, and the “price” of power are disjoint. the “cost” of generation and the “cost” of distribution likewise are disjoint. The problem here is not the recovery of cost, its the distortion of price.

    If we determine there is a social utility in central generation for coverage, baseload, emergency or concentrated usage in large endevours then the cost should be borne equitably.

    The problem is price. The price problem stems from deciding to convert utility functions to contestable services, in a belief this would reduce prices by the power of competition. The reality is that the regulated market failed, the monopolistic nature of the process determined a closed-loop of price rises, the price of the sell-off of the asset loaded the price of supply in a contract with long future terms, and we’re now impoverished on technology change.

    The answer, if, like me you believe in socialized costs of utilities, is to re-nationalize this function, and if need be, socialize the buy out cost. The buy out cost does NOT have to refund the future profit: it only has to return the capital investment to the current value in the marketplace. Which btw, is obviously a declining asset value because of the inherent risk in the collapse of the market.

    The combinations of capital which bought the asset are, by some ironies, actually ourselves: its our pensions. So in some sense, we’re dealing with a problem borne by our own selfish backs. If we can stomach it, the solution is simple.

    I know I’m preaching to myself here, but its what I beleive. This is a utility function and it should remain a utility function, and is simply not tenable long-term as a contestable marketplace. It doesn’t work.

    • Barri Mundee

      Quite agree George, the grid is a natural monopoly and it was another in a long list of neo-liberal moves that should never have been allowed to proceed.
      One can only speculate the situation today if the grid had remained publicly owned.
      The federal government is never fiscally constrained and has the capacity to buy out the owners.

  • Nick Thiwerspoon

    The implicit assumption is that you have enough roof space to put in enough solar panels to generate enough electricity for you. Now that may be true in suburbia in sunnier parts of the country, but it’s certainly not true for where I live, in winter. I have only enough space for 1.5kW of panels, and in winter will run the heating from 5 pm to 10 pm and again for an hour in the morning (15 kWh). It gets down to 0 C or below for 2 or 3 months a year. And the problem is worse for the townhouses down the road, with proportionately still less roof area to house size. Never mind six story blocks of flats or downtown skyscrapers. Much as I’d like to tell the utilities to shove it, I doubt that we will be dispensing with the grid.

    • Hugh Butler

      Another implicit assumption incorrect! While current PV may have actual conversion about 10%. But what will happen when existing CSIRO technology gets to production scale of 40%. Or 3D PV systems that may take that to 50%. So the 1.5kW is replaced with 15kw? The timescale will be only as long as it takes for existing pilot technologies ramp up to production levels. It is not innovation, but production lags.

    • Anouk Pinchetti

      Windy where you’re at, Nick?

      • Nick Thiwerspoon

        Sometimes. But “sometimes” is part of the problem, without storage. Even if I were to install this –and I’m tempted–I’d probably still need an emergency connection to the grid. But if the whole town were to club together and install a giant turbine, we’d at least need a micro-grid for the town. And prudence would connections to the wider grid.

        Downtown office buildings are never going to be able to detach from the grid. I might (I would love to, I’m so the hell in with electricity companies) but even I would struggle off grid. Adding the redundancy needed to guarantee continuous supply in all conditions would be very expensive.

    • Joshua Gunthner

      space and kW are not interchangeable. You either have room for 15 standard size panels or 8 (7.5?) standard size panels or 5 standard size panels that would fit the “space” requirement. But not all panels generate the same amount of electricity. Solarcity uses incredibly old tech and thus only generate 100W a panel. So from them you need 15 to reach 1.5kW. Newer panels generate up to 350W in the same footprint, so 1.5kW could just as easily be 5.25kW and that my friend is a huge difference. Say you zone only has 4.5 peak daylight hours. At 1.5kW x 4.5 hours you’re certainly going to be cold having only 2 hours 42 minutes of heat. At 5.25kW x 4.5 hours you can run your heat for that 6 hours a day and still have 8.6kWh remaining for other appliances and conveniences.

  • News Views

    I would question your “cost” of solar at 10-13 c a kilowatt hour. The true or real cost should also include the overly generous state government feed in tariffs and even those from retailers which served as the impetus for solar to take off in the first place. In Queensland the real cost of solar added about $200 a year to everyone’s bill and the 44 FiT is locked in until 2028. Cost should include the FiT – borne by all consumers whether they have solar or not.

    • trackdaze

      The fit of 44cents was paid to those that coughed up tens of thousands of dollars for fledgling solar tech. Kick starting a new era and adding The 800mw which effectively negated the state from having to urgently build new fossil fuel generators at the cost of billions. Some of these are worse off as campared to current installations that have higher capacity at a quarter of the price.

      Additionally over 1 in 10 have forfeited their 44cents on sale of the property. Go find another scapegoat.

      • News Views

        State governments don’t build power stations now – haven’t done so for years – private enterprise now does that and won’t build anymore for some times – over supply and reduced demand. And most people on a FiT are still on 44c in Qld. Check your facts.

        • So, two things news views. The cost of the solar bonus scheme is $49 per customer.

          The last big coal generator built in Queensland was Kogan Creek, by the GOVERNMENT-OWNED CS Energy.

          Check your facts.

          • Oh, Kogan Creek was completed in 2007.

        • trackdaze

          Do me a favour and check who owns the biggest generators stanwell corp and cs energy? You may be in part right as governments will tend to distance themselves ay least by name 😉 from poluting the environment.

          Like I said, the 44centers installed a virtual power station, paid alot more for their systems are reducing in number and allot would be better off if they had waited.

          Dont listen to what you hear from the news

  • Bollocks. Not to the disruptive innovation and restructuring ofvthe energy supply chain but to the death of the grid and large scale centralised gen (large scale industrial users can’t get the volumes they need from self-generation and storage at a financially viable cost). I’m a die hard renewables fan but if you continue to write advocacy rather than balanced facts (some spin allowed of course), I’m not going to read you anymore.

    • Well, why don’t you re-read the story: “There will have to be some large generation systems, just like big data centres today, but most generation and storage will be distributed.” CSIRO, NREL, even Engie agree with this. And “At this point, Seba says, centralised generation will not have a business model, and most utility-scale generation assets will be stranded.” Even the German utilities are admitting now they don’t have a business model for centralised generation, which is why they are getting out. Anyway, got to go, and get my latest photos developed at the Kodak store. What? Oh.

      • Have re-read. The only large volume storage available at the moment that is commercially viable is hydro pumped storage and that only works in some geographies and you need water and lots of money. In time of course large scale storage will be commercially viable whether in mass centralised or mass decentralised form or anything along the spectrum – but unlikely in the next 5-10 years. As you point out the activity is at the residential/small-to-medium enterprise part of the customer base, and of course distributed generation and storage have a massive impact here and immediately on distributors, and a lesser extent on transmitters.

        But again, you do a disservice by not acknowledging that even natural monopolies like distributors are capable of adaptation and innovation.

        You also discount the value of the grid to customers, even those that won’t to be self-sufficient. Just wait till a cyclone or bad storm hits or your new battery tech goes down … think about how reliant our modern homes and businesses are on a reliable supply of electricity. That reliance is only increasing. There is a value (monetary) that some customers will always put on the grid, whether they’ve thought about it or not. Sort of like the value we might put on a road even though we have a helicoptor, or a sewer even though we have a septic system, or a potable water supply even though we have our own rainwater tanks or borewater. There are many reputable studies about this by experts far more deep in the bowels of electricity land than you or I – commissioned for example by the US Government, Canadian Government and the European Commission. I’m sure the International Energy Agency, International Council on Large Electric Systems (CIGRE) have also done fairly boring uncontroversial published work on this. Some customers will want to export surplus generation and storage. Some customers will want to import that too. I agree with you that that needs to be freed up so they can decide. But … someone has to pay … and if it’s not the customer or the business … well you know how every great capitalist enterprise likes to go cap in hand to governments (even banks!?).

        For the record Kodak’s business is not the same as an electricity network utility business. Kodak sold imaging products. They even came up with the tech that ultimately was their downfall (from memory). It went bankrupt and now sells services around that core offering (whatever’s left of it).

        Electricity network businesses are more akin to the telecoms … some of which have survived quite well despite the advent of mobile telephony and ICT (e.g. Telstra). Electricity network businesses sell electricity infrastructure and services but happen to make money on a volume per unit of electricity that flows through their networks to customers. That volume based model is problematic because it assumes steady demand and consumption growth – this of course is being disrupted by decentralised generation and storage. It’s also problematic because it is regulated by an external regulator (the businesses allowed revenue and charges) and hat by implication brings in governments who are behind the regulator (and sometimes even the network businesses). But there is also the unregulated services which these businesses currently offer (e.g. smart metering, mobile network components and mobile generation when storms, bushfires, etc, hit) and could offer in the future (e.g. solar rooftop PV and utility scale storage, energy management systems behind the meter, etc. in packages for the consumer).

        So my point is the question is not whether distributed generation and storage are disrupting the supply chain and changing the electricity system from post WWII configurations (in some ways we’re going back to pre WWII) but rather how are incumbents and new entrants responding and doing business. Consumer is clearly king but market segmentation is quite different between an aluminium smelter that needs very high volumes of electricity, to a mine, to a paper recycling factory, to a high rise CBD commercial skyscraper, to your corner store, to mum and dad. And because the first waves have already hit in Western Europe and North America, the developing world, particularly the strong emerging markets, and us in wee Australia and New Zealand look well place – both in terms of some incumbents and of course, some new entrants.

        That is all.

        Good night.

  • Also I don’t know why you guys tend to think most people in network businesses are chumps? (I don’t work in one by the way)

  • And you don’t seem to know much about the economic regulatory model that is applied to networks by the Australian Energy Regulator – they’re not dumb either. Nor are the Australian Energy Market Commission or the Australian Energy Market Operator. Do you think network business investors including some governments want to lose all their money by not having their investment businesses adapt, and adapt fast? They’ve already haemoraged in Western Europe and North America . .. so do ours follow like lemmings?

    • mick

      have a look at what sapn are trying to do about the regulator,demand charges,smart meters and minimising country use of poles and wires

  • “an Internet of Energy”

    I thought about the same analogy, comparing energy with information.

    Back in the old days you had newspapers, tv channels and publishers that distributed information to the consumers. It was a model with almost exclusively central generation. The flow of information was unidirectional.

    Now we have the Internet and information creation is fully distributed. We still have big, central information generators like, but in addition to that we have a few billion publishers that are able to reach the same public as the ‘big boys’. For free.

    The exact same transition is now going on for energy. The only thing we need to safeguard is internet freedom. This is true for both ‘internets’.

  • Ian

    The electricity distribution network has got to be changed to an electricity network. Not all roads lead to Rome , all roads lead every where. Transmitting electrons from one place to another might become more expensive than solar and storage on an individual house or factory, but the fact remains that many will need to buy in electricity or transmit it from one place to another. For example, inner city dwellers may well want to take advantage of cheap self-produced solar from a remote site and pay some network fee to bring it to where they need it. The example of Kodak being compared with the electricity utilities needs to be refined. Kodak was the company, photography was the medium. Kodak failed to keep up with technology and it’s changing use, photography exploded in popularity. AGL, Origin and the like are the companies, energy generation, transmission, storage and use is the medium. A network is still an important part of this technology , turning it into a proper interconnected network will allow renewables to expand in use.

  • Billy Banegas

    One thing I can see happening as well, is the dispersion of the population. People will no longer need to live in or even near a city, they’ll be able to live anywhere the sun shines and have electricity, satellite TV, satellite internet, grow their own food, filter their water, anything. I just bought 6 acres of land with a view of the Caribbean in the mountains of Honduras for just $14,000 dollars, with a small house on it. I’m on the grid and have 4G internet, but 1 mile past me on the road, property is only 1/10th the price without grid electric, see the difference?

  • orko138

    Wouldn’t it be god parity when its below the cost of network charges alone (DUOS/TUOS)? Some renewables have already achieved generation parity, and exceeded it (ie. cost of solar/wind per MWh < coal/nuclear/gas per MWh). If PV+storage, or other decentralised and distributed solutions can undercut the grid itself, then market participants that rely on the grid will immediately be priced out of the market, making grid sourced energy an expensive afterthought.