London households are set to enjoy profitable green energy by 2030, a new report shows.
Renewable power generation and solar energy storage will encourage more consumers to leave the grid. According to researchers, this will cause a major disruption to the UK utilities sector.
The report is published by the Centre for Climate Finance and Investment at Imperial College Business School.
The research also reveals a ‘step change’ as more energy consumers turn to clean power like wind and solar power systems.
Cheaper energy storage batteries are also a game-changer for the big power production industries, the report says.
Profitable green energy transforms the grid
According to the research, Munich in Germany is even better placed to benefit from profitable on-site solar PV.
The results of the Centre’s climate and energy research are exciting, said Centre Director Dr Charles Donovan.
However, Dr Donovan added that the transition to renewable energy will be fraught with problems.
“[The results] show we will soon be entering a period where reliable and profitable solar power production by residential energy consumers becomes a reality in relatively cloudy places like London,” he said.
Dr Donovan said the UK government will then have a big problem on its hands.
“Solar and storage technologies are advancing rapidly and will bleed revenues from the utilities sector,” he said.
“Yet we need a financially healthy industry to enable large-scale investments in smarter, more flexible electric power networks. The transition ahead is going to be messy.”
Power parity and the ‘utility death spiral’
According to Dr Donovan, larger numbers of consumers adopting cheaper green energy options like residential solar power may hike up prices for remaining customers.
Consequently, there will be further reductions in demand, sending existing utilities into a ‘death spiral’.
The Centre has also developed the notion of ‘firm power parity’. This charts the milestones reached by clean energy in delivering the same energy at the same cost.
As Dr Donovan added, the old concept of ‘grid parity’ fails to consider the changing relationship between electricity producers and consumers.
