So many of the more radical proposals for the transformation of energy grids come from people with a vested interest to do so – wind and solar farm developers, smart grid equipment makers, think-tanks and consultants trying to make a splash and cash.

So it’s kind of interesting when someone with an apparent vested interest in maintaining the status quo – a massive utility with huge investments in coal, nuclear, oil and gas power generation, as well as large-scale solar – should provide an even more powerful argument for change, and for why he is tying his company’s future to a green economy – and this is in America, with no carbon price, and with clean energy incentives under relentless attack from the Republicans.

David Crane is the CEO of NRG Energy, which has more than 24,000MW of power plant in its portfolio, equivalent to nearly half the size of Australia’s entire grid, and which is one of the largest utilities in the US. In this fascinating interview with Yale Environment 360, he says the energy industry is moving rapidly from the “take what I deliver” approach to customers to "we'll do what you want". The massive centralised networks and operations like his own will be gradually broken into a decentralised system, and the consumer choice will be driven by two key technologies: solar PV and electric vehicles; and will be enabled by the rollout of another, smart meters. 

On solar PV, Crane says a few things that resonate particularly for Australia. Take for instance, his argument about net metering for rooftop solar. (Remember the debate in Australia about how much power utilities should pay for electrons exported to the grid, it’s a critical ingredient for the future of the solar PV industry.) Crane says net metering and the price paid for it is probably going to be the biggest issue for energy utilities over the coming decade or two. What follows is not an argument you hear from utilities in Australia:

“There are all sorts of complicated pricing questions, because what's being sold back into the grid should be sold, really, at a premium to the average 24-hour price, because almost without question the solar power that's going back into the grid is being produced during the peak hours of the day,” he says. “But each state has different rules on net metering and you will see a lot more distributed solar if the net metering in a particular state is fair or generous to solar power. But that will not normally be in the incumbent utility's interest because, mainly, what a utility wants to do is keep its rates to its consumers down and get these electrons onto its grid at a very cheap price.”
 
Crane is confident about the future of electric vehicles, and here is his view of how the EV parked in the garage will work with a smart meter and solar panels. (Remember, this guy owns a lot of coal-fired power stations and one very big nuclear plant):

“Right now around the country people are trying to introduce smart meters as just another information device. In our view, no one wants to pay for another information device, particularly when the information being given is about something that people don't care about, which is their electricity use. So smart meters will only be accepted by the American public when they do something of value.

“And the first thing that they'll do of value is they will sense when it's expensive to run electricity and they'll turn appliances off around the house. But the next thing they'll do, which is the most valuable thing that will actually put dollars in your pocketbook, is that when the smart meter recognises that the wholesale system is getting tight and there is good pricing, it will actually sell into the grid from the car battery. Or if power from the grid is getting really expensive, the smart meter might just turn the house off from the grid and then run the key appliances in the house off the electric car in the garage.

“Then you have the solar panels on the roof. If you tie in a rooftop solar panel with a smart meter, then it's exactly analogous to the electric car battery. The smart meter could turn off the house from the grid at 3 in the afternoon and rely exclusively on the power that's coming from the solar panels on the roof, saving the customer a lot of money on their bill from the grid. And if the person puts a big solar panel on their roof, they could sell power from that.”

Crane says the cost of rooftop solar PV and EVs may remain prohibitive for most consumers for a few years, but in the next three to five years, solar PV will be delivering electricity cheaper than the grid, and that will lead to exponential growth. “Solar is going to go from this thing that right now is like 0.1 per cent of the market to 20 to 30 per cent of the overall electricity mix. That's huge.”

Yes it is. And Crane also has some interesting views on the politics of clean energy, that also resonate with the situation in Australia.

Crane: "In the last four to five years, energy and the environment have become completely politicised along the same red/blue lines that divide every other major issue in Washington. I think that is extremely unfortunate because, if you look at the history of energy and environmental policy – well, the last big energy bill, which was passed in 2005, was passed with bipartisan support. The Clean Air Act of 1990 was signed by George W Bush. So the fall into partisanship is definitely a step backwards.

And he has an interesting take on Solyndra, the solar start-up that collapsed despite receiving a loan guarantee under a Department of Energy program that was similar to Australia’s proposed Clean Energy Financial Corporation, and which is now being used by the Republicans as an example of green energy waste, just like the federal Opposition here is painting the CEFC.

“I would say look back at the early history of the high tech industry. Companies and chip makers failed all the time. The manufacturing business in any new area is a brutally Darwinistic place. One thing Solyndra was impacted by is that the cost of their product dropped like a stone, which is our basic point. …What's bad for Solyndra is good for the consumer.”

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