Citibank: Utilities are dinosaurs waiting to die

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By: SGN Staff

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Quick Take: A new report authored by prominent Citibank analysts claims the global energy mix is shifting more rapidly than realized. If true – and these are some smart, smart people – it has major implications for generators, consumers, and most of all utilities. In fact, the study says utilities are most at risk because their business model is likely to change.

 

I've been arguing for years that utilities should either evolve to become "wires only" companies. Or else get busy offering additional services, such as rooftop solar and microgrids. For instance, in my "Electronomics" series, I explained why utilities MUST change their business model (and one way to get started).

 

This Citibank report suggests that the problem is even more urgent than we realized. Use the TalkBack form at the bottom to agree or disagree. - By Jesse Berst

 

Today's electric power utilities could lose half their addressable market to energy efficiency, solar and storage, and other distributed generation, according to “Energy Darwinism – the evolution of the energy industry," a new report from the investment banking arm of Citibank.

 

“Consumers face economically viable choices and alternatives in the coming years which were not foreseen 5 years ago,” the analysts write. According to REneweconomy, the price fall of solar panels has exceeded all expectations, resulting in cost parity being achieved in certain areas much more quickly. “The key point about the future is that these fast ‘learning rates’ are likely to continue, meaning that the technology just keeps getting cheaper. At the same time, the alternatives of conventional fossil fuels are likely to gradually become more expensive.”