More than any single category segment or technology, the economic future of the energy industry will be determined by the elevation of energy customers from mere consumers at the end of the value chain to active participants in the value chain.
The ability of established industry participants like utilities, generators and commodity providers to manage this transition will determine the winners and losers in the industry. If you question the impact of customers, this recent Smart Grid News item should remove any doubt. It is titled Utilities: What Walmart’s power plans say about your future (it’s scary!).
In my opinion, the key line in this article reads “Wal-Marts motivation is purely economic — saving money on power bills.”
If solar industry supporters are waving a victory flag over Wal-Mart’s massive solar deployment, they are missing the bigger picture and making a potentially fatal error. At its heart, this move by Wal-Mart is not necessarily an endorsement of solar technology or even distributed generation. It is however a clear indication that C&I energy customers can significantly impact their own energy economics from behind the meter, using both supply and demand strategies, while having a profound impact on established players.
Think of the energy industry as a bike chain. The established, centralized energy industry players are represented by the big sprocket ““ the point where energy is pumped into the system. Customers are the back-wheel gear cassette which adjusts to system stress. While each rear cassette cog is important, the real value is the ability to smoothly shift gears (i.e. from distributed generation to demand response to energy efficiency) as grid conditions and economic opportunities dictate. Customers that respond more effectively are more valuable to the system and create more economic opportunities for themselves.
New energy economy winners will be companies and investors that help energy customers maximize economic returns on the megawatts and negawatts that they contribute to the energy grid, not vehicle they use to generate them.