Europe has taken renewable energy generation further and faster than any other region of the world in terms of system penetration, and now appears to be heading into a maelstrom. Where Europe falls, others will follow. Perversely, the impacts of the successful build out of low carbon generation could put at risk the consensus behind climate change mitigation policies. US utilities should take note: never before has the need for international comparison been so pressing. Ross McCracken discusses this issue in a story that appears in this month’s edition of Platts Energy Economist.
There has been talk in the United States of the utility “death spiral,” a process in which environmentally-targeted subsidy support enables consumers to disengage, partially if not wholly, from the electricity grid through demand-side management and distributed generation. Utilities, required to invest to incorporate renewables into a centralized system, are left in an unsustainable situation of higher embedded costs and fewer customers.