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Why Elon Musk Is a Utility Executive’s Worst Nightmare

SpaceX CEO Elon Musk

SpaceX CEO Elon Musk // Jack Plunkett/AP

Attention US utility executives: You have a decade at most before the boom in renewable energy makes your century-old business model as relevant as a rotary telephone. In the time it takes to get a transmission line built in California, solar energy production and other new technologies could render obsolete the monopoly business of selling electricity at a fixed price for a fixed profit to a captive audience of consumers.

Sound far-fetched? Just ask German utility executives how their coal-fired power business is doing. In the course of a decade, Germany has transformed itself into a green energy powerhouse. On Oct. 3, for instance, nearly 60% of the electricity generated in Germany came from wind farms and rooftop solar panels. That’s pushing fossil fuels off the grid and utility profits off a cliff. Utility EON’s profit isexpected to fall 40% this year, according to Bloomberg, and it and other traditional power producers are moving to shut down coal and natural gas-fired power plants.

“Solar is most productive in middle of the day when coal is usually fired up,” Chris Nelder, an energy consultant, said yesterday at the Verge green business conference in San Francisco. “Now in Germany, at certain times of day power prices go negative and utilities have to pay to put electricity on the grid.”

Read the full story at Quartz.

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