European utilities scared of renewable energy

Another reason Southern Company needs to get on with a smart grid, using its biggest private R&D outfit in the U.S. Now that solar has reached grid parity with everything including natural gas (and years since it passed nuclear), if the utilities don’t get out in front, they’re going to be left behind.

Derek Mead wrote for Motherboard yesterday, European Utilities Say They Can’t Make Money Because There’s Too Much Renewable Energy,

Renewable energy has been on a tear the past few years, with growth in many countries spurred by subsidies for wind and solar power. Now the heads of 10 European utility companies say EU subsidies should end, because they've got more renewable energy than they know what to do with.

The 10 CEOs in question, who refer to themselves as the Magritte group because they first met in an art gallery, represent companies that control about half the power capacity of Europe. The group gave a press conference today— Reuters says that 10 such executives giving a joint public statement is “unprecedented”—to hammer home a message they’ve been trumpeting ahead of an EU energy summit in 2014: There’s too much energy capacity, which has driven prices down so far that they can’t make any money.

As long as there are nukes or coal plants, there’s too much capacity. European utilities need to get on with things like connecting north German wind generation with south Germany or making better deals with nearby countries such as Poland, while working up wave and tide generation in the Baltic, North Sea, Atlantic, and Mediterranean. Add links to sunny and windy north Africa and middle East, and problem solved. This Magritte group can accomplish that if it wants to lead instead of going Luddite.

Who are the Magritte group? posted 11 October 2013, Energy CEOs call for end to renewable subsidies,

The group — which includes top utilities such as France’s GDF Suez, Germany’s E.ON, Spain’s Iberdrola and Italy’s Enel — has made an impact, as several countries, including Spain, Germany and France, have reviewed or are reviewing support schemes for renewable energy….

The group—which also includes Germany’s RWE, Italy’s Eni, Spain’s Gas Natural, Sweden’s Vattenfall, Czech CEZ and Dutch GasTerra—calls on the EU to set up capacity remuneration systems that would pay utilities for standby capacity.

The Motherboard story goes on with the utilities’ weepy complaint that solar and wind are subsidized yet they have to keep their old-style nukes and natural gas plants running for when the wind don’t blow and the sun don’t shine. Excess capacity, boo hoo. Georgia Power keeps raising rates here for natural gas and nukes while wallowing in state and federal nuclear subsidies and trying to charge us more for solar power. Utilities love subsidies, as long as they prop up guaranteed monopoly profits! Sorry, utilities, as Edison Electric Institute has warned you, your cozy century-long centralized baseload business model is being busted by rooftop solar.

Solar stocks are beating fossil fuel stocks for a reason, and that reason is Moore’s Law for solar: solar PV prices keep falling every year, pushing solar deployments up every year like compound interest. That’s is going to leave fossilized utility execs out of work like Steve Ballmer of Microsoft because of Apple’s iPhone, and he went from laughing to fired in only six years.

Solar power will win like the Internet did, and there’s nothing the traditional utilities can do that will stop it. They can slow it down (expect artificial blackouts soon), but it’s going to happen. Utilities can get out in front and lead, or get left behind in their coal smoke as the sun rises. Put that in your pipe and smoke it, Magritte group, while you still have smoking pipes left.