By: steve papagiannis

Sat, 17 Sep 2016 18:15:00 +0000

I think that the shift to distributed power will eventually be a large part of our power system. Even if costs are slightly higher than grid power, there are a set of benefits that will be nudging us towards it: 1) The resiliency that distributed power brings means that an Ice Storm event isn’t going to be debilitating to you or your city; 2) for an individual, once your investment is made, you will have a known cost for your power that can make it tempting as a long term investment; 3) some people appreciate the self-sufficiency idea and some people just want to “stick it” to giant corporations, so this would be encouragement for them. There are several others, but you see the point. Even at a slight premium, distributed power can sell.

Your article brought something that I hadn’t thought about: the effect on capital investment, and it has some important effects. If this happens quickly, the existing capital that is sunk into infrastructure will have a reduced return, causing some heartburn for those investors, as these are typical amortised over long periods of time. The other problem is where the new institutional capital will go. Currently power investments have been large and long term, so large players like pension funds and institutional investors have been happy to put cash into known returns.

What happens when new infrastructure plans don’t materialise? Where will that money go. It will certainly free up billions of dollars and these people are going to have to deploy it. I have no idea that that will do to financial markets, but something’s going to go sideways when that extra money needs a new home.

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Comments on: What’s Holding Us Back from a Distributed Energy Model Replacing Existing Power Grids?

By: steve papagiannis