8 global energy trends addressed at the Utility of the Future Leadership Forum
Speaking at the Utility of the Future Leadership Forum on Tuesday in National Harbor, Md., DNV KEMA CEO David Walker touched upon the energy trends he sees impacting grids across the world. Walker suggested that today's energy developments—whether they be breakthroughs in technology, new regulatory frameworks or alternative utility business models—are no longer isolated and create ripple effects throughout the global energy industry.
Here the energy trends Walker spotlighted that could influence the global energy sector for years to come:
1. ELECTRIFICATION IS GLOBAL
The developing world, the growing global middle class, more urbanization, the ever-increasing need for electricity access and advances in information technology and transportation are all driving the electrification of the world.
2. ENERGY PROBLEMS ARE GLOBAL
Today, every energy issue is an international one. For example, when Germany started to go solar through feed-in tariffs, the world took notice and energy providers began to plan new business models around it. Now, Germany is facing problems due to the long-term unsustainability of incentivization, and other countries are considering how to run their own subsidization plans. Another example is Japan's Fukushima disaster, which has recently driven Germany's move from nuclear generation to offshore wind. In this day and age, energy issues have become inseparable from each other—a problem on one side of the globe is bound to influence the energy industry on the other side of the globe.
3. CONSUMERS HAVE POWER
Consumers can now take the power into their own hands—literally. With microgrids and distributed generation, consumers potentially have the ability to create their own "micro-utilities."
4. PROVIDERS ARE UNDER PRESSURE
Electricity access is a requirement for today's society. Customers expect 100% reliability, low cost and immediate outage restoration. Every consumer is a reporter who can create pressure and spread a message with just a smartphone. Politicians and even regulators pressure utilities for the customers. In this climate, the added pressure of results for investors creates consolidation and takeover risks.
5. NEW TECHNOLOGIES = NEW BUSINESS MODELS
New technologies are driving new business models across the globe. Smart grids provide great opportunities for customers and the environment but are very complex technologies for utilities to handle. Cheap, embedded sensors give real-time data, but data volume and cybersecurity are becoming big issues. Privacy of consumer data, generating facilities and the grid itself are at risk due to this complexity.
6. FUTURE IS ALL ABOUT BREAKTHROUGHS IN TECHNOLOGY
On a macro scale, new technologies will transform the industry in years to come. For example, super grids, which are being installed right now in China and Brazil, are pathways to shift massive volumes of electricity over large distances while floating wind turbines are being piloted in deeper water off the coast of Japan.
7. GRIDS NEED TO BE RENOVATED
Grid infrastructure built in last century is wholly unprepared for renewables integration. Climate change is causing extreme and unpredictable weather on global scale, meaning the grid also needs to be hardened. Billions (if not trillions) of dollars are needed for upgrades, but the grid needs its own incentives to modernize. U.S. is emerging quickly from the recession and is also enjoying a resource boom (i.e., natural gas) at the moment—hopefully this will lead to more of a willingness to invest in infrastructure.
8. NOT ALL UTILITIES WILL GO EXTINCT
Utilities will still be needed in the future, but the utility of the future will need to be very flexible. Change is coming faster than ever before and utilities can persevere through sheer will, patience and adaptability.
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