NRG Energy Inc (NRG): This Visionary CEO Is Killing the Energy Paradigm

The end of utilities?
Crane sees change coming for our energy economy as a whole. He notes that technologies like electric vehicles and solar generation are positive catalysts, while hurricane Sandy was a negative catalyst. “If we keep having extreme weather events and the inadequacy of the system keeps revealing itself, people may not want to keep reinvesting in something that’s 100 years old the day it’s built.”

Crane believes that solar and wind are about to separate; wind needs high-voltage transmission lines and solar does not. He thinks solar and natural gas belong together – “They just don’t know it yet.” He observed that while natural gas prices have plunged recently, consumers have reaped almost no benefit because the savings have been captured by middlemen. “Americans have spent $150 billion on natural gas and it’s not going into our pockets. Someone has taken $150 billion from the American public and they want it back.”

Crane reckons that the natural gas industry will figure out that they can disintermediate utilities and deliver directly to the consumer, basically cutting out the middleman. NRG Energy Inc (NYSE:NRG) is preparing for that, with plans to supply customers with both solar PV and natural-gas-fired generation packages. Natural gas would provide a stabilizing balance to solar’s unreliable availability, such that customers would only need grid connections as a backup.

Sustainability matters
After the conference, I asked Crane why retail investors should care about this stuff.

If you’re a long-term investor, you have to think in terms of societal trends and where they’re headed. Sustainability is one of those trends, and it’s as much a business driver as anything else. The generation of people who started college around 1995 views social justice and environmental issues as fundamental considerations, and they’re all in their mid-thirties now. If you’re investing in your future, and your children’s future, then you have to include this in your analysis.

Now that’s the kind of vision I want to see from a CEO.

The article This Visionary CEO Is Killing the Energy Paradigm originally appeared on Fool.com and is written by Sara Murphy.

Sara Murphy has no position in any stocks mentioned. Follow her on Twitter @SMurphSmiles. The Motley Fool has no position in any of the stocks mentioned.

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