Elon Musk’s Clean Energy Vision Includes a Strong Role for Utilities
Recent comments show the Tesla CEO is not pursuing decentralization at all costs.
Elon Musk has staked a claim on a distributed energy future, but recent comments suggest he’s not going to be a fundamentalist about it.
The billionaire has arguably done more than any other individual to accelerate electric cars and make distributed energy desirable. His vision, detailed explicitly in his Master Plan, seemingly renders the traditional role of the electric utility obsolete.
This stance has prompted many a think piece framing the future of energy as a battle between Musk and billionaire investor Warren Buffett, who owns several utilities via Berkshire Hathaway Energy and favors a more centralized approach of utility-scale renewables projects feeding the grid. The apparent dichotomy between their world views only strengthened when one of Buffett’s companies, NV Energy, succeeded in its efforts to charge rooftop solar customers more and pay them less for the electricity they put back into the grid. That development struck a blow to Musk-affiliated SolarCity, which subsequently pulled out of the state.
Of course, it’s likely that neither of these two visions will succeed entirely, and the future will be determined by some sort of compromise struck between them. That outcome appeared in a statement made Friday by none other than Musk himself.
Before showing off the fancy new solar roof product Tesla has been working on, Musk unveiled new versions of his Powerwall and Powerpack batteries, and ventured into big-picture territory.
“The solution is both local power generation and utility power generation — it’s not one or the other,” Musk said.
He went on to suggest that the breakdown in electrical generation will be two-thirds utility and one-third local. It’s worth noting that this forecast refers to an electrified future where the grid powers things like transportation and heating, which currently utilize fossil fuels. That means the pie of electricity consumption that gets divvied up will be significantly larger than it is today.
One-third might not sound like victory, but that would be a major coup for distributed energy, which is still very small compared to overall utility-scale generation.
That’s also an olive branch for the utility industry, which has been hearing rhetoric from some sectors of the solar industry that clean energy will eradicate customers’ need for an entrenched, monopolistic utility to make power for them. Musk is affirming that, with all the power we’ll need in a low-carbon, electrified world, there will be plenty of room for utilities to make money.
