Note – this article was originally published on www.charleyrattan.com
Renewable energy often uses ‘fuel’ which is essentially free. This is particularly the case for wind power which utilises abundant air flows that surround us as well as for marine generation which utilises the motion of the waves and the power of the tides in the sea. A speaker at a UK energy outlook seminar recently revealed bluntly that prices of electricity will continue to rise – then who will be the winners and who will be the losers in a rapidly changing energy landscape? This article details three examples of each:
1) The biggest winners will be the forward-thinking individuals and organisations who embraced the change; they may have bought a green contract (Power Purchase Agreement – PPA) or they may even be ‘prosumers’ generating their own electricity and selling it to the grid at the most opportune time. These early adopters who took advantage of the support offered to a nascent industry took the risk and those who survived, are winners.
2) Those that studied their overall energy usage and looked for efficiencies; sought best deals through switching suppliers are also winners; they were proactive and will reap the rewards.
3) The supply chain and associated host communities of renewable developments. They took the risk early and are now receiving community and employment benefits. They range from turbine manufacturers to cable suppliers and harbour communities and hinterlands – as evidenced in places such as Humberside and Lowestoft.
Of the ‘losers’ several historically crucial industries come to mind:
1) Oil and gas majors with their fossil heritage are switching to renewables and even the name of businesses is reflecting this. They are maintaining shareholder value by repurposing existing assets and strengths to make the transition happen. Examples include Shell, BP, Equinor and Ørsted. In this instance, the energy transition has been embraced leaving potential losers as large-scale winners.
2) Heavy energy users who sit and do nothing risk becoming increasingly uncompetitive as the dynamic marketplace passes them by. They may complain but the information they need is out there and available. Let us hope they follow the example of forward-looking giants and the burgeoning RE100. The opportunity is there.
3) Coal will perhaps be the biggest loser, the days of the coalfield with a giant power station on top are over and, although it may cling on in parts of the world, the European future for coal producers is limited. Perhaps a strategic reappraisal of skills, along with re-use of their sites and infrastructure will enable the transition to be orderly as possible.
Change is happening. Like any Strength, Weakness, Opportunities and Threat (SWOT) analysis, there will be winners but also, if they fail to act, losers. The information is out there, and the global transformation is well underway. Indeed, there are examples of previously concerned groups such as fisheries engaging with the transition and doing just that. As Charles Darwin said, ‘adapt or die’.
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