There are three major tipping points coming for the US electric market and this is how they will affect Glendale if we put in a new $500 million dirty power plant that is financed over 30 years.
These three tipping points are going to revolutionize the electricity industry and they will happen in the next 22 years:
2025: When electric vehicles become affordable for all
2031: Generating and storing your own power will become the same price as buying from utility (solar is already cheaper but home storage isn’t)
2040: Self-generating 100% of your power becomes cheaper than delivery via the grid
The proposed Grayson plant would go online in 2021 just before electric vehicles become affordable for all and there will be a wide adoption of them. This will increase off-peak power demand as users charge their cars overnight. This will also lead to a surge in solar installations as solar will be the go-to method to lower one’s electric bill. Plus, all new homes in California are going to be built with solar starting in 2020 there is going to be a huge influx of solar into Glendale.
So far, so good. Grayson is sized way over capacity, demand is down but things are ok.
In 2030, all utilities in California will have to produce 50% of their power from renewable energy. None of the power produced at Grayson will qualify as renewable. With GWP’s contracts with dirty power plants in Burbank and other places, Grayson at best will only be able to supply 35-45% of the demand.
In 2031, when generating and storing your own power is the same price as buying from GWP every household is going to start installing solar and battery to avoid time-of-use fees and reduce their electric bill. They will still connect to the grid for the occasional top-up but they will supply 80 to 90% of their own power. This is going to affect peak demand enormously. Since Grayson will only be able to supply 35-45% of the electricity at most, the Grayson plant will be sitting idle for much of the year.
Demand will be down and so revenues will be down. How is GWP going to pay for this? They’ll raise rates, driving more people to switch to self-generation, which will lead to less revenue, which will lead to raised rates… It looks like the utility death spiral for GWP’s electric division.
In 2040, as solar and batteries continue to become cheaper and more efficient, it will actually be cheaper to self-generate 100% of your own power than to buy from GWP. Customers will start to go off-grid en mass to avoid the monthly service fee.
Now GWP is stuck with a $500 million dollar dirty fuel plant that is barely going to be used and they will still have another 11 years of payments of $29 million per year to make on it.
I was born last century and 2031 has always sounded so futuristic – like we’ll be in flying cars and living on Mars, right? Well, it’s only 13 years away. If you think about how fast time flew by since 2005 (13 years ago) you’ll appreciate that this is really right around the corner.
Repowering Grayson is the wrong choice for Glendale. We need a solution that we can keep using 100% after 2030 and that gets us through the next 20 years, not a dirty power plant that we can’t even use at capacity after 2030 and that will be a cause for bankruptcy in 2040.