The utility death spiral is a great example of system complexity that is simple to understand. Solar energy costs have plummeted so far that in most places you can get electricity cheaper from your own solar panels than you can from a utility. The impact on the grid of people doing so at scale is to lower the overall cost of electricity generation by reducing both peak demand (and so peak pricing) and lowering volume. Utilities are then stuck with expensive physical assets, less sales and lower margins, so they need to increase either the cost per unit of power or impose grid connection charges to customers. But doing either gives customers more motivation to leave the utility — thus the death spiral.
Posted on: Thu, 20 Mar 2014 22:48:39 +0000