The chief executive of a generator manufacturer told CNBC on Friday that he expects drastic changes are coming to power production and his company is making moves to capitalize on the future of electricity.
Aaron Jagdfeld, CEO of Generac, in an appearance on “Closing Bell” said new battery technology has opened the door for households and businesses to become energy independent from the traditional electric grid and break away from centralized systems.
“We think that there is a massive change coming real soon in the grid,” he said. “You’re going to see a lot more decentralized, on-site power generation, from solar to wind. Batteries are a key component of that, of course, because you need to be able to store that energy so that you can use it and deploy it at different times during the day.”
The comments come after the lights went out in parts of New York City, where a power outage struck the upper part of Manhattan and subsequently a section of the Queens borough Friday morning. The outage interrupted service to about 167,000 customers in total and lingered in some areas for hours.
Consolidated Edison, which supplies power in the city and Westchester County, released a statement saying it is investigating the issue. Three transmission networks lost power supply around dawn and were restored shortly thereafter in sections of Manhattan’s Upper West Side, ConEd said.
Jagdfeld said, “The demand for our products has been very robust, going all the way back to last fall with the shutoffs in California for fire safety reasons, and it’s really accelerated here with the pandemic,” as people work, learn and shop from home. “The idea of having a power outage now more than any other time I think is just completely untenable for people.”
Later that morning, Mayor Bill de Blasio said power had been restored by the start of his 10 a.m. press briefing and that the outages could be tied to overnight weather conditions.
Earlier in the week, power was knocked out to millions of customers on the East Coast as downpours and strong winds from Tropical Storm Isaias swept through several states and led to the deaths of at least seven people. The storm made landfall in North Carolina as a hurricane.
Officials with the National Oceanic and Atmospheric Administration’s Climate Prediction Center said Thursday that the Atlantic hurricane season is shaping up to be one of the worst on record due to sea conditions in the tropical Atlantic Ocean and Caribbean Sea. A record nine storms have been named thus far in the 2020 season.
As Bank of America sees it, that could lead to a windfall for Generac, which makes backup power generators for residential and business customers. An analyst upgraded the stock Friday, in a note called “Prince of Darkness,” predicting that the company has a hold on about 80% of the North American residential market for standby generators.
The stock tacked on another 3% in Friday’s session, to close at a high of $178.60. The stock is up more than 77% this year.
Battery technology is a key component to power decentralized electrical systems, and Generac has made progress to gain exposure to the emerging segment of power generation, Jagdfeld said. In April, Generac acquired battery storage manufacturer Pika Energy to enter the energy storage market.
“Storage costs have come down; solar costs have come down. The combination of that technology shift, and then, obviously, the shifts that have been ongoing with regulation incentives that are out there around these new technologies, we see a dramatic shift in the way the electrical grid is going to be deployed over the next decade,” Jagdfeld said.