FW: Utility executives speak up on solar's future - Power Engineering

The ultimate (and inevitable) solution is customer and community-owned
distributed systems, but these guys don't like to go there as it leaves them
out of most of the equation.

http://www.power-eng.com/articles/2011/10/utility-executives-speak-up-on-sol
ars-future.html

Utility executives speak up on solar's future
Oct 20, 2011
By Lindsay Morris
Associate Editor

DALLAS - The year is 2031. An electric utility company becomes the first
utility in U.S. history to receive its primary form of generation from solar
power. This was the scenario presented by Julia Hamm, president and CEO of
the Solar Electric Power Association (SEPA), during a Solar Power
International session on Oct. 19.
But what would need to happen in order for this fictitious scenario to
become a reality? The obvious answer lies in government subsidies, which are
now looking grim in the aftermath of Solyndra's bankruptcy.
Beyond the hopes of tax grants and a national renewable standard, what can
the power industry do to see solar implemented into utilities' portfolios on
a higher scale? Hamm said that collaboration between utilities and solar
businesses is key, introducing six executives of municipal or public
utilities to discuss solar integration at the utility level.
Randall Mehrberg, president of PSEG Energy Holdings, said that financial
decisions to install solar projects have to compete with another price tag
most U.S. utilities are currently facing - the cost required to retire or
retrofit a large percentage of their coal-fired fleets. "Cost, at the end of
the day, is what haunts us all."
While some utilities may turn to solar power as filler to replace
pre-existing coal-fired generation, Mehrberg said that most will turn to
"low cost, prevalent natural gas."
Electricity costs are bound to escalate over the next 20 years, said James
Rogers, chairman, president and CEO of Duke Energy (NYSE: DUK). This will
happen as a result of a large amount of coal generation being turned over
and necessary improvements to grid reliability. However, solar will become
increasingly attractive to utilities as the cost of solar power continues to
descend, Rogers said.
Utilities must be instrumental in educating their customers on the value of
solar - that it's worth paying a few extra cents each bill, said Larry
Weiss, CEO of Austin Energy. "I continue to be dumbfounded by consumers who
want to have their cake and eat it too. They have to be willing to pay more
for renewables."
While the inherent cost of solar can be disconcerting, utilities must
recognize that solar power presents an element of cost avoidance not found
in traditional forms of generation, said Doyle Beneby, president and CEO of
CPS Energy. "For every 1 MW of solar I install, I don't have to worry about
the Clean Air Mercury Rule, or a host of other EPA regulations."
CPS Energy is in the process of retiring 850 MW of unscrubbed coal, Beneby
said, some of that generation will be replaced with solar power.
When looking long-term, utilities should also consider that the U.S. may
eventually implement a carbon tax, said Armando Olivera, president and CEO
of Florida Power & Light Co. "The U.S. is the only major country not
imputing the cost of carbon. It will eventually be taken into
consideration."
Rogers of Duke Energy echoed his thoughts. "By investing in solar, you're
putting a hedge on against what a lot of us think is inevitable: carbon
regulation."
For now, the addition of renewable energy into most utilities' portfolios
will be incremental, said Weiss of Austin Energy. "We cannot switch all our
generation overnight to solar and wind. But solar is a small part of the
equation."

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