Inefficiencies in conventional power generation and distribution are driving both generation and storage to become increasingly decentralized and distributed to the customer. The implications for the energy industry will have knock on effects for all sectors as business models and costs fluctuate. Our latest Gist, Distribution of Power, explores these issues shaping the future of energy.
What is changing?
Two key disruptions are currently emerging for the energy industry: renewable energy (RE) and distributed energy resources (DER), and our latest Gist highlights these two technologies.
This is a high level Gist which means it relies mainly on the Indicators from Shaping Tomorrow to summarize the expected future of energy. A short introduction is provided to prepare the reader for the information contained therein, and since the Indicators spell out many of the plausible futures for the energy industry, the reader is encouraged to create their own scenarios and analysis specific to their situation. To facilitate skimming through the document, the Indicators are numbered with references directly linking to their sources for quick access to deeper research.
Opportunities for energy savings are beginning to emerge, and risks from the resulting disruptions will begin to show in the decades ahead. Below is an excerpt from the Impending Concerns section including 6 of the 91 Indicators featured in the Gist.
Beginning of the End?
- Fossil fuels are already decreasing. While renewables still have a long haul, they will eventually tip the scales. At the same time, investment institutions are recommending investors to abandon their fossil fuel portfolios to avoid impending government regulations and societal pressures.
- Fossil fuels’ contribution to primary energy growth is projected to fall from 83% to 64% by 2030. (BP Energy Outlook 2030)
- Coal is now expected to be the slowest growing fuel. (BP Energy Outlook 2035)
- SBC advises clients against fossil fuel investment. There is an increasing risk that fossil fuel companies will become “economically non-viable”. The growing concern over carbon pollution raises the possibility of a regulatory or tax crackdown, both at the national and international level. If investors fail to get out of fossil fuels they “may one day be seen to be late movers, on ‘the wrong side of history.’” (HSBC Advises Clients Against Fossil Fuel Investment)
- Net energy available to society might actually peak and decline even as gross energy extractions continue rising. (Is hard-to-reach energy slowing down economic growth?)
- The federal US Energy Information Administration reckons that by 2040 the US will be generating 32% of its electricity from coal (compared with nearly 42% now). (The fuel of the future, unfortunately)
- In 2013, the world began adding more capacity from renewable sources than from fossil fuel sources, and the shift will continue to accelerate. By 2030 more than four times as much renewable capacity will be added. (Fossil Fuels Just Lost the Race Against Renewables)