The energy landscape is changing
Change is coming to the energy industry, and it’s a change that has already impacted established industries such as consumer packaged goods and the beverage industry. What used to be considered mass commodities are now lifestyle choices in which customers put their money where their values lie. Navigating through this period of adjustment will require companies and brands to have a broader view and deeper understanding of the currents and currencies of change that are upon them.
The Rise of Renewables
Hydro and wind will make up the largest shares of renewables in 2040, although the share of wind power is projected to level off by 2018. The biggest growth is expected to come from solar and geothermal generation, capacity of which is expected to more than double by 2040. The rise of solar energy will bring with it a change in the way energy is delivered, as the big increases in solar are expected to come from small rooftop homeowner installations. Not only are the sources of electricity generation changing, so are entities that generate electricity and the grid that delivers it.
Decentralization, Microgrids and Democratization of the Energy Grid
One of the biggest changes in the energy industry is in how energy will be delivered. Most of the electrical transmission facilities are decades old and built to serve large centralized plants to provide a steady and reliable energy source. However, as energy preferences change and new distributive technologies emerge, customers are increasingly keen to make their energy choices more democratic and their communities more resilient through decentralized, smart microgrids and extensive use of renewables. An additional advantage of a decentralized grid is that the economic benefits of power generation will become as dispersed as the ownership of the sources. The emergence of the microgrid—a small-scale system connecting diverse power sources, transmission lines and local users—can empower local energy decision-making and improve resilience, proving that cost alone is not the only factor involved in decision-making. The continued operation of micro-grids at Princeton University during the Polar Vortex and Hurricane Sandy demonstrated their potential.
Environmental concerns, local reliability, and consumer lifestyle choices are challenging the notion of energy as a commodity, allowing customers to elect the power that represents their needs, including generation and distribution.
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