Cutting the apron strings: Will power companies survive the next twenty years?

Fifty times a second, the great heart beats, sending blood rushing down wide arteries, forking through a network of veins and then trickling, spent, from an undulating capillary. Its mouth already open expectantly, the cell sucks down a deep draught from the nourishing elixir. Without this regular infusion, the cell would quickly perish, but it knows not, and cares not, of the identity of its distant benefactor.

Every house in the developed world is such a cell. Since the dawn of the electrical age that has lit up our nights and so changed our society, we have lived in blissful ignorance. Our coal powered economy has delivered tremendous improvements in our standard of living. But now, with the acrid smoke swirling in our midst, smarting our eyes and coating our lungs, we are stirring, gazing around ourselves for the first time, and wondering if all is right.

In the last decade, a movement has begun gathering momentum. Motivated by the dual pressures of climate change and rising electricity prices, residents have begun pushing back the flood of electrons from the grid. Many a roof is now decorated with solar panels. Some even have micro wind turbines humming with the breeze.

Compared to the giant furnaces of coal power stations, these small installations are just an ember blown by the wind. But should the ember meet kindling, a blaze could erupt that would quickly consume the grid and the power utilities that tend it.

A set of circumstances is approaching that could enable the emergence of a new electricity network. If the cost of solar panels plummets far enough, it will no longer be sensible to buy power generated hundreds of kilometres away. Coupled with rapid improvements in energy storage, we may soon reach a point where neighbourhoods, and even individual houses, can satisfy their own power needs.

Grid parity is approaching fast and may be as soon as five years away. Will power companies react quickly enough to harness this new opportunity, or will they be swept aside by the pace of change?