How renewable energy will change the economical model of our societies.

Our living standards are base on abundant low cost energy. The energy demand will continue to grow for many decades as the economy of emerging country will, and everybody understand that fulfill this future need with fossil energy is unsustainable for the planet. This will change our economical model, locally and globally.

Even if there are many sources of primary energy and many corporations that compete on the global energy market, this economy segment is highly control by a small amount of very large corporations. This economical structure is support by the needs of large investment to extract raw energy from where they are abundant, transform it, and transport it to users. The huge facilities require at all stage favour the concentration of business in the hand of existing players.

On the other side, renewable energy is available everywhere. Both wind and sun are free and can be used by everybody. Few large corporations had tried to produce utility scale wind and solar farm with little success. No one for now can achieve that without large amount of subsidies, and power delivery is random.

Long term evolution of world energy mix count many variables, but also some certitudes:

1-    Fossil energy represent today close to 85% of our primary energy mix. We will see peak oil as many claim, and after reduction of gas and coal production, but it is clear now that it will take many decades before its append, and even centuries for coal.

2-    Green energy (formally can soft energy) will have to be spread everywhere. This mean extreme decentralisation, and necessarily democratization of energy production.

3-    Most nations will eventually vote new laws and rules against greenhouse gas emission, but probably to lately to stop climate changes. This will then change the competitivity within green and fossil energies.

The only real question is when.

All forecast changes depend on competitivity within renewable and fossil energies. We can count that every year, world demand for energy increase by an average of 3%, but at what time grid managers will consider that fulfil new demand will be cheaper with renewable energy? At which moment a small corporation or a farmer will be able to install 2-3 megawatts of solar or wind energy, and sell its electricity without subsidies? At what point a corporation will be able to received a valuable payback in order to self-produce a part of its energy needs?

We usually count on fossil energy cost to continue to grow; unfortunately, shale gas and oil had stopped this trend for the moment. We can also expect sun and wind energies cost to continue to decrease, but as they are random sources, they will be count as a serious alternative for new demands only if they propose electricity at half cost of reliable one.

International agreements have the most disruptive potential of change. With a $30-50 charge on equivalent ton of CO2 emitted, best clean energies sources will be able to produce a close to free electricity, which will then put a strong pressure on the market.

The new economical model of renewable energies.

Those changes will have significative effect on economical model at all level:

-        Worldwide; as renewable energy is available everywhere, its growth in the energy mix will make country with small resources less dependent of others that have oil or coal in excess.

-        On corporative scale, the monopole of large conglomerate will not be break, but significatively weakened. The multiplication of small corporation (up to farmers level) that could supply energy at competitive cost with stabilize energy price for long term.

-        Corporations will seize the opportunity to reduce and stabilize their energy cost will be more competitive on their market, forcing their competitors to follow the trend.

-        As clean energy is a high capitalization investment, it is spend rapidly, and it will be easy to finance with long terms mortgage. This means jobs creation and economy growth, without subsidy.

-        Grid managers will eventually produce less electricity and become energy broker, with a large amount of suppliers and complex tariff models.

-        The large amount of random energy sources will create a viable business model for energy storage and transformation.

-        Fossil electricity facilities will work less often, but selling price will be higher as base on spot demand. Profitability of those facilities will stay the same, but fossil burning will decrease.

You already understand that we believe that “Wind Can Do It”.