I still think there is a fundamental need to re-think the energy market though - specifically on the role the power utility plays. Clearly they won't be selling a great deal of power but they play a key role in absorbing spikes (both up and down) and stepping in when the grid needs to be balanced. Somehow they need to be fairly compensated for that universal arbiter role & charging per unit of electricity doesn't seem to work well on this new landscape.
While change is happening and change in inevitable I think you're greatly overestimating the rate of the change and badly misunderstanding the quality.
You are probably going to move where the power is cheap though:
http://www.bloomberg.com/news/articles/2015-03-17/silicon-me...
In this case, Alcoa is performing aluminum smelting in Iceland precisely because of cheaper geothermal power generation available there.
Yes, as my pre-comment scan of the Wikipedia article on aluminum smelting (to double-check I had the right electricity-intensive industrial process) said in the second paragraph [1]. I didn't think it worth adding to the comment.
Of course aluminum plants move to where electricity is cheap, all else being equal... exactly what alternative do you think I was proposing?
Further, geothermal is significantly different for this use case, as geothermal can be used for base load applications where solar can not. Since such plants tend to run without regard for where the sun is in the sky, this sort of industry would be very difficult to run off of solar power without absurdly overprovisioning for power storage, which remains a significant problem at this scale. You are also not going to run your aluminum smelting plant for 18 hours out of the day on battery power!
Here's another fun thought: 6% of electricity is lost due to transmission costs. Will it be more efficient (in some cases, at least) to physically move charged batteries from solar fields to (nearer to) end users than to send it over the wire?
No, not in this universe, anyway.
The most basic power distribution in the world is people with Ox and cart distributing lead/acid batteries to remote villages. Transmitting power this way is the least efficient way possible.
http://blogs.scientificamerican.com/plugged-in/2014/10/07/en...
It looks like a Tesla S battery pack is a little over 1,200 lbs. So for a rough estimate, consider the distance a Tesla S can tow 20,000 lbs. Probably not very far.
Unless I botched my reasoning somewhere, it looks like battery energy densities would have to increase by an order of magnitude or two for this to become a thing.
Give it time.
In 2003, Alaska built the world's largest battery at 4.7MWh.
In 2012, China built the world's largest battery at 36MWh.
In 2014 Southern California Edison announced it was buying a 400MWh battery.
On that curve, we should be up to an 18GWh battery before all that long.
I would be shocked if Tesla Energy isn't assembling entire systems cargo container by cargo container in Reno and shipping them by rail across the country in the next 2-3 years.
https://en.wikipedia.org/wiki/Bath_County_Pumped_Storage_Sta...
Pumped hydro electric storage ftw.
That's the situation I'm familiar with, but that may be a peculiarity of the under-developed grid in my area.
Building smelters next to coal fields is a way of producing cheap aluminium. Coal is still the cheapest way to make electricity - it's only places where the government has explicitly made this not the case that coal is expensive.
Generally unfavourable government regulations simply moves production to places without the regulation - for no net change in production or coal consumption. Sometimes it's a net negative if the new location has lower local emissions standards and technology.
People are sometimes fooled by sunk capital costs of old power plants.
Besides, an ability to increase production implies idle production capacity, which, as you state, is a poor use of capital allocation.
Lots of people see a few solar panels and tesla announcing sleek batteries, and think a new age is upon us. Not yet.
Take a look at Hawaii - the "rate of the change" is so big the utility pretty much stopped connecting people's PV panels because the grid couldn't deal with it.
As the percentage of renewables increases the fluctuations grow bigger. e.g. Germany already has 40GW of solar installed...so if its overcast then you need an entire fleet of nuclear plants to pick up the slack (sure it doesn't drop to 0GW but you get the point).
Those companies you mentioned that will still need power - not sure how that is relevant to the fluctuations? Or do you propose that they carry to cost for everyone?
The majority of energy usage is in commercial processes - factories and commercial buildings.
Think about an airline. To make money it has to fly when it's customers want to take a flight - not when the spot price of jet fuel is advantageous. An airline which flew when the price of flying was cheap would attract a niche market of price sensitive travellers. Everyone else wants the flight at a set time.
The same goes for industrial production. If you spend money building a large commercial business which has specific energy needs, you want that asset producing a return as close as possible to 24x7x365. There are very few types of industry that lend themselves to batch production (which implies spending capital to create overcapacity to absorb spikes).
The need for baseload generation is not going anywhere. The more advanced and productive the society, the higher the need for baseload power.
Yes, it is. Baseload is a principle you can take advantage of to introduce massive plants that need to output at 100% almost all the time, like nuclear plants. There's no intrinsic need for baseload. What matters is always matching the demand curve. You can do that with variable sources like wind and solar with a dispatchable source like hydro or gas, just as in the baseload + peak situation.
Look around you at the things which are consuming power 24/7. Look beyond your dwelling at the street, the neighbourhood, the city and the country.
All those things require constant power 24/7, without interruption. That is what baseload is. It's not some invention of the existing generation industry, it's a function of demand. It's not some conspiracy theory dreamt up by the nuclear power industry.
Cities without baseload power have long periods of blackouts and intermittent power. These are places of lower standard of living.