Former Duke Power CEO: I'd want to work in solar

duke power photo
CC BY 2.0 mikebaird

In a recent interview with Energy Biz magazine, outgoing Duke Power Chairman Jim Rogers was asked what he'd have done if he was entering the business today:

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.

The industry sees the writing on the wall
We clean energy advocates often argue (or hope!) that the energy sector is undergoing disruptive change, but the signs keep piling up that the energy industry itself is beginning to feel the same way.

From the major German utility that wants to transform its business model to Nevada's public utility embracing renewables, there are industry insiders who see the writing on the wall for the traditional utility monopoly.

Holding back the inevitable
While fake free marketeers may try to stem the growth in renewables, the real challenge for utilities is that disruption is coming from multiple angles to challenge the profitability of their business model.

Disruptive change from multiple directions
Businesses are discovering that demand management can shave large chunks off their energy bill. Large corporations—traditionally a disproportionately profitable customer for utilities—are increasingly investing in their own clean energy generation capacity. Solar power costs are dropping dramatically. Dramatically more energy efficient lighting is about to become the norm, not the exception. And energy storage and other solutions are beginning to tackle the problem of variable supply from renewables.

There will be a price on carbon
And all this is happening before we start getting serious about putting a price on carbon—a development which, incidentally, Jim Rogers thinks is inevitable:

Every decision we make today we make with the knowledge that there will someday be carbon regulation in this country. There will be a price on carbon. And since we make decisions for 30, 40 and 60 years, we need to take that into account. 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.

Change happens
If you'd have told me 15 years ago that I'd carry my phone around with me (and that I could read the news on it), or that I'd be working from home on a laptop computer, I'd have laughed at you. If you'd have argued that video stores would be going out of business and I'd be streaming my entertainment online, I'd have been skeptical. And if you'd have suggested that there would be 100% gasoline-free cars that drastically outperform their fossil fuel counterparts, I would have rolled my eyes.

The electrical grid is not going away anytime soon. But the traditional utility business model is going to have to change. If I was an industry insider right now, I'd be looking for ways to move beyond "compliance" when it comes to clean energy. It will be the innovators and leaders who come out on top of the disruptive changes that are already underway.

The status quo is broken
Meanwhile, one of the power plants Jim Rogers used to be responsible for leaked 82,000 tons of coal ash into a North Carolina river. Let's remember that, next time someone argues these changes are going to cost too much.

Tags: Carbon Emissions | Economics | Electricity | Energy | Energy Efficiency | Renewable Energy | Solar Power | Utilities

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