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Is Big Generation Circling the Drain?

Aug. 11, 2014
Is big, centralized generation becoming a relic of the past?

Last months article, Distributed vs. Centralized Generation: Battle of the CEOs discussed two views of the future utility paradigm. One side sees the industry moving to almost total distributed generation, where customers become the generators with rooftop solar, small natural gas powered generators and perhaps distributed storage. Each customer would have more generation than they need and the excess would be shared through distribution networks. So voila! Big generation goes the way of the dinosaurs. 

And of course, so does big transmission!

Not so fast! - says the other side. For a number of technical reasons, particularly the loss of load diversity as the generation gets closer to the individual users, completely distributed generation will never fly. Also, tax and rate subsidies hide the true economics of solar PV. 

Maybe not, but there's no doubt that centralized generation is under siege. Coal is being hammered by weak electric wholesale prices, rising costs, public opinion and, more than ever, tightening regulations. 

Nuclear is pretty much on hold because of investment uncertainties. And of course the still ongoing misery of Japan's reactor disasters continue to sour the public's opinion of nuclear power.

We have plenty of natural gas, of course. And one vision would have gas powered plants near clusters of gas wells. This scheme avoids networks of gas lines. But siting of new transmission lines has its own roadblocks.

So there you have it. What do you think? Is big, centralized generation becoming a relic of the past? Also, your comments are valuable to other readers. Please share them.

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