Published on March 10th, 2013 | by Zachary Shahan20
Reuters Goes All CleanTechnica On Solar Power & Utility Profits
March 10th, 2013 by Zachary Shahan
Reuters is a well known multinational news agency not exactly known as a political radical. It’s actually extremely neutral and “objective” (there’s really no such thing as objectivity in media coverage, but let’s not delve into that today). No offense to the notable news agency and its reporters, but its pieces are often about as dry as the U.S. Southwest has been in recent years.
So, I was a bit surprised to see Reuters delve into the threat renewable energy is providing to utility company profits in quite a similar way as CleanTechnica has done. I mean, frankly, the first two paragraphs of the recent post I’m referencing looked very similar to paragraphs from one or two of our recent articles. See if this looks familiar to you:
Every new solar panel installed on European rooftops chips away at power utilities’ centralized production model. Unless they reinvent themselves soon, these giants risk becoming the dinosaurs of the energy market.
The industry faces drastic change as renewable energy turns consumers into producers and hollows out the dominance of utilities. With their stocks at decade lows and a millstone of debt around their necks, Europe’s utilities have little margin for error.
Quite frankly, these are simple statements that reflect the reality of the situation today. But I haven’t seen them mentioned almost anywhere beyond sites like CleanTechnica — actually, I don’t think I’ve seen them mentioned anywhere beyond such sites! So, it was surprising and exciting to see that.
It’s also interesting (seems atypical of Reuters) that it included such colorful language as “these giants risk becoming the dinosaurs of the energy market” and “a millstone of debt around their necks.” Again, that just seems to go beyond the typical dry and “objective” language Reuters uses.
Anyway, the article is really a good one, so I’d recommend checking it out in full. I’ll just add one more extended quote here (note that this follows the more typical literary style of the news agency):
In Germany, where 22 percent of its electricity came from renewable sources in 2012, the big four utilities – E.ON, RWE, EnBW and Vattenfall Europe – are nearly absent in this new sector.
Of the 71 gigawatts of renewable energy capacity installed at the end of 2011, the four owned just 7 percent, environment ministry data show. A gigawatt roughly corresponds to the capacity of one nuclear plant.
Individuals owned 40 percent of renewables capacity, energy niche players 14 percent, farmers 11 percent, various energy-intensive industrial companies 9 percent, and financial companies 11 percent. Small regional utilities and international utilities owned another 7 percent.
In the solar industry the big four are even more marginal, having ceded 97 percent to investors from outside the power industry, Lueneburg University researcher Mario Richter said.
“Utilities produce electricity, and here’s a new technology for producing electricity, and they are not in there. They have completely missed the opportunity,” Richter said.
Richter, who has interviewed 20 German utilities managers about the impact of renewables on their firms, said it has taken them years to acknowledge the potential of solar and wind.
In Bavaria alone, 200,000 of the 2.3 million electricity users have their own solar panels, turning 8.5 percent of electricity consumers there into independent producers.
In Italy and Spain, where solar also contributes around 3 percent of total power, the situation is similar to Germany.
In countries like France and the UK, with solar at just 0.4 and 0.1 percent of generation, centralized production still reigns supreme, but decentralized production by corporations and municipalities – with biomass and windmills – is eating into utilities’ market share.
Reuters certainly has the story correct. And it’s nice to see this important story getting picked up by the mainstream media and reaching more people. I’d recommend checking out the full Reuters piece for more good reporting, including the “Eroding Business Model” of utilities, “a real revolution” in electricity production, and the “winners in the power game.”