Effects of Renewable Energy on Current Infrastructure

The current infrastructure in the developed countries varies in very obvious ways.  The domestic voltage and plug sockets are the first items the public relate to.

For much of the 20th century, electricity was produced by state-controlled monopolies.  From the 1980s onwards, many of these were broken up and privatised so that market forces could determine where best to invest.

Now in Europe the major utility companies are facing falling returns, depreciating assets and pressure to reinvest.  The base cost of this investment has seen government again broker deals in particular in the UK at Hinkley Point in Somerset owned by EDF Energy.

Renewable Energy Investment

Wind Turbines and photovoltaic cells still only generate 7% of the world’s electricity.  In the last decade they have become the fastest growing energy source fuelled by the world’s need for climate change  and desire for clean green carbon-free energy.

Renewable energy is by its nature intermittent, subject to the vagaries of sun and wind.     So in countries with unfavourable weather, the turbines and solar farms are dormant at certain times.

This fact that these plants are dormant or have low output for long periods has reduced the appetite of private or corporate investors.  This is despite the economic fact that renewable energy has low running and maintenance costs as the sun and wind are free.

Government Investment and Subsidies

So to kick start and encourage investment governments have invested heavily.  Now the growth of renewable energy efficiency is driving the price of this electricity down.

There is now a glut of power generating capacity in certain developed countries, and this has affected the wholesale power markets.  The more renewables the worse the problems get.

Places with an abundance of wind, such as China, are curtailing wind farms to keep coal plants in business.

So ironically the more states support renewables, the more they pay for conventional fossil fuel or nuclear power plants.

Flexible Supply and Demand

The main task now is to redesign power markets to reflect the new need for flexible supply and demand. They should adjust prices more frequently, to reflect the changes in the weather.

For Periods of high demand the price structure could have a high fixed price and lower price in low demand times.

To summarise, policymakers should be clear they have a problem and that the cause is not renewable energy, but the out-of-date system of electricity pricing.

To read the full article from the Economist click here

BHW are specialist renewable energy solicitors based in Leicester

 

 

 

from bhwsolicitors blog https://bhwsolicitorsblog.wordpress.com/2017/02/24/effects-of-renewable-energy-on-current-infrastructure/