Clean Power

Published on January 31st, 2014 | by Giles Parkinson


Why Traditional Utility Companies’ Days Are Numbered

January 31st, 2014 by  

Originally published on RenewEconomy.

Former head of US largest utility says regulations and business models will not change quick enough to save traditional utilities in face of solar.

Jim Rogers, the recently retired head of Duke Energy, the biggest utility in the US, has had some interesting things to say about the fate of the traditional utility, particularly with the proliferation of rooftop solar.

jim rogers utilitiesIn an interview with Energy Biz Magazine, Rogers says there is no doubt that utilities are under fire from new technologies such as rooftop solar, and are in danger of losing customers to new players.

Indeed, if he were entering the industry now, that’s where he would want to be – in rooftop solar, attacking the market rather than defending it.

“The utility industry has been like the proverbial frog that’s been put in a pot of cold water, and the heat’s been turned up,” he said in the interview.

“And it’s been turned up slowly. The many challenges ahead are going to fundamentally change this industry.

“Leaders in this industry in the future are going to have to run to the problems that they see on the horizon, embrace the problems, and then try to convert the problems and challenges they see into opportunities to create value for their customers as well as their investors.”

This is not the first time he has said such a thing, though not quite as dramatically. Last year, Rogers warned that the progress in solar and storage would mean that customers may simply use the grid as a back-up some time in the future.’

Asked later in the interview what approach he would take if he were entering the industry now, Rogers initially replied that he would like to come back as David Crane, the CEO of NRG – the largest privately owned generator in the US – who has been extolling the virtue of solar and the transition that would likely create, and warning that customers were likely to disconnect from the grid if utilities did not evolve quickly enough

“Maybe I should take that back,” Roger added. “I would come into the industry as someone who is an attacker, not a defender. I’d want the solar on the rooftop. I’d want to run that.

“I’d want the ability to deploy new technologies that lead to productivity gains to the use of electricity in homes and businesses. I would go after the monopoly that I see weakened over the last 25 years.

“My goal would be to take customers away from utilities as fast as I could, because I think they’re vulnerable. Regulations will not be changed fast enough to protect them.  The business model will not be changed fast enough.”

Rogers said all utilities should be making decisions based on the assumption that there will – some day – be a price on carbon. “Our industry needs to lead on environmental issues. We need to lead on productivity gains in the use of electricity. That’s a critical way for us to continue to reinvent ourselves as an industry.

Nuclear supporters may be cheered by his outlook for nuclear, which he said would be centred almost entirely around China, and the development of Chinese technology, including modular reactors.

“They will lead the world in the building and operating of new nuclear plants over the next 30 years.

“They will develop the supply chain and build nuclear plants in a modular fashion. We will have to change our rules and regulations and how we think about the Chinese. They’re going to bring us the nuclear technology to replace our existing plants at a lower cost and build new ones faster than we can.”

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About the Author

is the founding editor of, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

  • Ananya

    If it has to be nuclear, then better it be THORIUM based.

  • Rick Kargaard

    There is plenty of roof-top space in rural and suburban settings to provide power for high rises and business. The grid will still be needed as well as storage..

    • CaptD

      Agreed, see my comment below.

  • MikeSmith866

    I think Jim Rogers needs a dose of reality. Roof top solar makes sense for single family homes and single level office buildings but unfortunately more and more homes and offices in high rise buildings where solar won’t be sufficient.

    They also have to get the price down for Solar storage to get it to be truly competitive against centralized nuclear power.

    • Bob_Wallace

      Compare the cost of new solar to new nuclear.

      Compare the cost of paid off solar to paid off nuclear.

      Don’t mix your apples and oranges.

      • MikeSmith866

        In this case cost is not the main part of the story. Jim Rogers is arguing that decentralized power is the way of the future. I agree it is for low rise dwellings and offices.

        But lets say we are trying to serve New York City with solar and wind. The roof top and ground space is not sufficient to serve the multiple floors. So you are forced into centralized power.

        Now if power from solar and wind farms away from the city will compete with nuclear 12 months of the year, then I would take wind/solar over nuclear.

        We have had the discussion already about consistency and this may become a bigger and bigger problem as we get more blizzard weather that could clog up solar and give us wind patterns that are not productive.

        But in any case, cities with multiple high rise buildings will require power from outside the city going over the traditional grid whether we like it or not.

        • Bob_Wallace

          Are you confusing New York City with the highrises of Manhattan?

          Yes, there will be small portions of countries where population density will be high enough that on a block by block basis there won’t be enough rooftop space.

          We’re not going to build nuclear reactors inside our cities. Power to densely populated areas is going to be generated outside and piped in regardless of how it is generated.

          • MikeSmith866

            OK, lets take a 3 floor building. Could the land lord, put solar panels on the roof and get enough energy to serve the entire building?

          • Bob_Wallace

            What’s the point of your post, Mike?

            Are you interested in discussing all buildings producing all the power they use? If so, that’s not likely possible. Especially if the buildings contain some sort of energy intense operations.

            Or are you misunderstanding dispersed generation?

          • MikeSmith866

            I understand that we will have less power going over the grid but in areas with high rise (3 floors or higher) apartments and office buildings we will not be able to provide all the power with solar panels at the sight.

            So we will still need the grid to supply whatever power they need beyond their local source.

            There will be less power going over the grid but we will still need the grid.

            In single family and low rise buildings (like Wal-mart) they may be able to disconnect from the grid because their solar panels may provide all the power they need.

            Do you agree with what I am saying?

          • CaptD

            Mike I believe that in the future the solar roofs efficiency will be such that even residential solar will once pushed inio the grid will make up for multi-level construction in most cases; especially if home owners start to get paid a fairer amount for their energy! As people get more for each watt generated, I look to many installing as much solar as they can, which will only make other forms of generation less and less as time goes on.

          • MikeSmith866

            The issue is surface area of the roof. I am of the opinion that if a home or low rise office building covered 100% of their roof with solar panels, they would have enough power given improving solar efficiencies to disconnect from the grid. But if the building was 3 floors high, I believe the solar production would not be sufficient to supply all 3 floors.

            This is just my guess, if there is someone here who knows the answer, I would be pleased to hear from them.

          • CaptD

            You already are hearing from Bob_Wallace who is someone that you can depend upon to steer you right about solar and especially solar panels.

            I’d also suggest Paul Gipe, who is a wind expert:

            I believe that in the future most will still be connected to at least a “local” grid if for no other reason that to better share their generated energy and/or battery storage. Those that choose to be off the grid will have to build in far greater capacity in order to have enough for those dark rainy days, but hey many will do so because they are willing or forced for whatever reason to live off the grid!
            Good Luck.

          • Bob_Wallace

            Mike, please find some place where I have stated that the grid will no longer be needed.

            If you can not find anything then please drop this stuff.

          • MikeSmith866

            I am sorry you have misinterpreted my remarks. I was not referring to you, I was referring to the article which said
            “Last year, Rogers warned that the progress in solar and storage would mean that customers may simply use the grid as a back-up some time in the future.’

    • CaptD

      Mike, nothing long term is as expensive as nuclear, which is why using nuclear is no longer practical as even Wall Street is starting to realize and that is when everything is working great, and should things go BAD then all bets are off as the Trillion Dollar Eco-Disaster at Fukushima has everyone running scared!

      • MikeSmith866

        I should have said centralized power. If we can build solar or wind power outside the city somewhere – that’s great. I would leave the decision up to the engineers as to the type of green power they would build.

        I am trying to make a different point. I don’t think roof top solar or mini windmills in cities with high rise buildings will produce enough power to disconnect from the grid. The grid in my view will still be needed to serve most cities and many towns. To me single family homes and low rise buildings have the best chance of disconnecting from the grid.

        • Bob_Wallace

          You might look around at all the warehouse space in many cities as well as parking lots. There’s more solar space available than you might think.

          Not necessarily enough to supply all the city’s solar, but enough to make a dent.

          • MikeSmith866

            Just so you know where I am coming from. In Ontario we pay both “delivery” charges and “metre” charges as separate line items. Further the metre charges are broken out into high, medium and low rates in accordance with our smart metre.

            We are careful to use our power in the low times but at the end of the month we often get hit with delivery charges that are higher than our metre charges.
            So the hydro utility has basically rigged the system to get us coming and going.

            So I have dreamed of getting off the grid. But the more I look at things, I believe only a small percent of the population will be able to pull that off.

            Farmers can install mini wind towers on their property. They can install ground mounted solar that will follow the sun.

            I think many city dwellers will have great difficulty getting off the grid. As long as they get even a small part of their power from the utility companies, they will hit them with delivery type charges and they will have no choice but to pay them.

  • Evangelia Paraskevadaki

    it’s easy to say the truth, when you are not to do something about it… I agree to all of his points though

    • Matt

      He wasn’t walking the walk as Duke CEO.

  • Ross

    Put in a call to the politicians to stop resisting change.

  • bsw

    Jim for President.

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