We are presently at a nexus of Technology when it comes to the way that we power our homes, industries, and economy.
There are three components to this change:
- Solar Panel & Wind Power Technology & Pricing
- Storage Battery Technology & Pricing
- Electrical Appliance Energy Efficiency Technology
There will be mass decentralization of the power grid in developed countries
Many of these trends will be highly beneficial to the developing world where centralized electrical grids are in poor shape and often non-existent in rural areas.
In just over 10 years it is predicted that “Utility Scale Photovoltaic Solar” will become cost competitive for the majority of the world and on par with fossil fuels. Can you say another blow to those economies that produce fossil fuels.
It is estimated that PV solar power will make up 1/3 of electricity infrastructure investment globally in the next 25 years, a 3.7 trillion build. But this build will be incredibly disbursed, on the rooftops of homes and small businesses, and mostly funded by the home and business owners. The driving force behind this will be the fact that electricity that doesn’t have to be transported long distances on the grid will be cheaper than grid feeds in virtually all major economies.
This is the point in which battery technology comes into place. As we all know PV electric works fine as long as the sun is shining, but when it sets; no power. Tesla is bringing high tech battery storage technology developed for its cars to the home front, and they won’t be the last for long as Tesla is on record saying that it wants to develop much of its technology open source.
Lastly, the technology developed for all of our mobile devices will creep into almost all of our other electrical appliances. Again Battery technology is part of this but so are all of the technologies that make these devices power misers, as energy saving technology infiltrates the broader spectrum of household appliances, the power requirements of households are expected to drop. Just think LED lightbulbs, even in the last year these bulbs have taken a 50% price drop and can be picked up at major retailers for $4-10/unit. Even cooler, many of these bulbs are paired with smart chips that allow you to integrate them with home automation tech, forgot to turn off you light, that is consuming 80% less energy, no problem, turn it off with your smart phone. Even with the developing world becoming more affluent, global electrical production should remain fairly flat.
So, What about Wind and Natural Gas Electrical Generation?
Most countries in the world do not have an over abundance of Natural Gas. The continental (North American) oversupply appears to have minimal impact on the switch to renewables, the cost is just dropping too fast, and inertia is building. Within 12 – 15 years it is expected that Wind Power will be cheaper than utility scale gas generation.
Where is the proof? Enmax Energy, an Alberta Based Energy company has recently launched two initiatives, one PV Solar, and one Wind Power. They have contracted to build individual PV and wind systems on private residences, with a financing arrangements that for most people will be revenue neutral when the excess power is sold back to the grid. Payback is still 15 years, after which you are making your own free power, but the economics of this break-even point will continue to decline…apparently very rapidly. The largest problem that we face however is that our current centralized electric energy system is encumbered by massive regulations that are probably not as flexible as the timelines for this tectonic shift in how we produce electricity.
One of the most interesting things that I find is how technology is scaling everything down to the individual. A relevant book, though dated is “Small Is Beautiful”
This shift will happen over the next 25 years. (Reference Bloomberg.com, June 2015)