As an energy manager with more than a passing interest in sustainable power sources, it’s interesting – and business relevant – to track the history of electricity generation especially in the free markets of the USA.
When electricity first began to replace candles as a source of domestic light and as other electrical devices replaced manual ones about the home, many homes installed generators to provide their power.
Cost efficiencies and the benefits of economies of scale meant that, soon, street then community generation prevailed. As the market size escalated, the business case for major capital investment was clear and it wasn’t long before companies like General Electric and Westinghouse began building power stations to service entire towns and cities. Indeed, the availability of electricity on this scale and as a commodity helped to fuel the growth of towns and cities.
So, history lesson over; how is this relevant to today?
Two converging events brought this to my mind.
Firstly, Capgemini is soon to install a significant number of solar photo-voltaic (PV) panels on the roof of one of our larger UK offices. The business case for this was one of most difficult on which I’ve had to work. Not because of its complexity but because of the very long elapsed period before we begin to see a return on the investment. In a business regime that expects to see a pay-off from capital expenditure in three to four years (and we’re not unusual in this respect), making the case for longer ROI was testing to say the least. However, falling solar PV costs combined with projected escalating electricity prices brought an acceptable base-line into view and we should see the first panels installed in a couple of weeks. But – just as in the days of autonomous power generation, a sole business generating sustainable electricity for itself is a costly venture – often prohibitively so.
The second event that brought history to mind was a visit I made to the Drax Power Station in Yorkshire – England’s largest county in the north of the country. Drax has its legacy in coal but in July 2012, the American owned company announced that it had the mandate, means and expertise to transform the business into a predominantly biomass-fuelled generator through burning sustainable biomass in place of coal. In April 2013, Drax converted the first three of its six generating units to burn biomass, and the new biomass receipt, storage and distribution systems to support the converted units were officially launched in December 2013. My visit was enlightening in many ways but not least because it showed that big business is prepared to make significant investment in new fuel sources because it knows the customers – also big businesses – are out there.
So again, just as in the days of autonomous power generation, corporate innovation and market observation is again resulting in the centralised, mass-produced model of (this time) sustainable electricity.
Guest Blogger Craig Hall, Group Energy & UK Operations Manager [CRC Lead]
With more than 25 years in building management, Craig Hall is an operations manager with a wealth of experience, skill and foresight. Craig has developed Capgemini Corporate Energy & Waste Strategy to deliver efficiency across our portfolio of properties. Craig is working on a solar PV deployment in the UK and a Smart Meter project in India.