Aug 282016

Last week Chilean power distributors signed a contract for solar generated power at the lowest rate ever, half the price of energy from coal powered generators.

As  the cost of solar panels continues to fall, the need for coal and gas powered facilities continues to dwindle but given solar panels don’t need to be located in a central location, the nature of distribution networks is changing.

With power generation becoming more localised, communities don’t need expensive connections to power grids. In disadvantaged regions and developing nations, villages that would have to wait decades to be connected, if at all, now have a pathway to dramatically improving their standards of living.

Distribution companies that exploited their monopoly positions in providing power across wide networks are now having to reconsider the value of their expensive assets and lucrative business models.

Those countries and companies who thought high coal prices would bolster their standard of living, such as Australia, must be rueing their focus on fossil fuels. The massive investments made by mining companies and compliant governments are now increasingly looking like stranded assets.