Unstoppable smart energy
Regardless of whether there are leftish, right-wing or central politics at play, people power and market forces are pushing the use of smarter energy forward at considerable speed.
The deployment of the largest battery storage facility in the world in South Australia, together with the many solar and wind farms that are relentlessly being developed in this country – mainly driven by private investment – as well as the continuous growth of private solar panels, are slowly but surely driving changes in the energy market, in spite of the national policies aimed at frustrating these developments in favour of coal-powered generation.
National governments such as the ones in Australia and the USA might still try and protect their incumbent fossil industry interests, but they are fighting an uphill battle.
While fossil energy will have to be with us for quite some time it would be much better for those stragglers to face reality and develop long-term transition plans. Many countries in Europe are exactly doing this, with Germany, the Netherlands and Scandinavia leading the pack.
I am just back from the Netherlands and there I came across a significant number of long-term infrastructure transition developments. That country, for example, is heavily dependent on its own natural gas and over the last 50 years most Dutch households have been connected to the gas network (especially for heating and cooking); yet the decision has been made to phase out gas by 2050. This allows for clear policies in relation to new housing developments and gives the installed base plenty of time for the transition. It also generates a range of new innovations, economic developments and the creation of new businesses and new industry sectors.
A similar policy, this time in relation to sewerage, sees cities replacing existing infrastructure with much bigger pipes to handle the increase in rain expected as a result of climate change. There are also clear long-term policies in place to phase our petrol- and diesel-fuelled cars. These are all long-term forward looking policies, providing certainty for all market parties involved in these transitions, and creating significant new economic impulses, again linked to innovation, technological developments and business opportunities.
It is sad to see that in countries with polarised policies such as Australia and the USA it so incredibly difficult to develop long-term infrastructure policies. The current disaster with the Australian national broadband network is a classic example of this.
As mentioned in previous analyses, in countries with polarised national politics city policies are perhaps the only viable option for long-term smart energy and smart infrastructure developments.
Wherever you are in the world deep energy transition is now developing rapidly. This includes incisive penetration of intermittent renewable sources, fragmentation and distribution of the generation and production points, diffusion of efficient and innovative technologies, and a value shift from energy production to the supply of new services. The latter is very similar to what has happened in the telecoms industry over the preceding two or three decades.
According to the ENTSO-E report from 2016, in the EU alone E150 billion will be invested over the period till 2030, mainly to support the integration of renewables and increased security of the power grid. The benefits of these investments are expected to be up to 2.5 times higher than the costs (reduction of up to E5/MWh in electricity prices compared with an increase of up to E2/MWh in grid fees).