Energy drives everything in modern life. It is key to modern productivity, economic growth and our very standard of living. This is why changes in the energy sector impact everyone and every facet of life. Yet the energy sector is experiencing a number of changes. Some of these are driven by consumer demands, others by sustainability needs, shifting energy sources and increasing regulation. Let’s look at the future of the UK energy market.
Increasing Demand
Worldwide demand for power is soaring. Sixteen percent of the global population lacks access to reliable electricity supply. In Africa, the proportion rises to nearly two thirds of the population. Their governments are focused on meeting power demand and improving reliability. In the developed world, there are efforts to reduce energy demands and increase sustainability. The UK is expected to see increased demand in heating and transportation, but it is difficult to predict.
Decarbonisation
Decarbonisation is one of the biggest shifts in the EU and UK energy market. Businesses are often installing smart grid technology so that they can reduce energy usage and increase their green credentials because it is such a strong selling point.
Reducing energy usage also reduces their carbon dioxide emissions. One of the biggest ways the UK energy market has decarbonised is by moving away from coal, though power generators wonder how they’ll be able to renew aging plants and meet decarbonisation commitments. One solution has been a dramatic rise in the amount of natural gas we burn. We’re also increasingly relying more on solar panels and wind turbines. The downside has been the increased reliance on intermittent, weather-dependent sources. New technologies are necessary to mitigate that risk.
Disruptive Technologies
Disruption of the energy market is taking many forms. People used to buy power from massive power plants that generated massive amounts of base load power. You chose an energy provider and rarely changed, because changing providers hardly made a difference.
Now, consumers’ expectations are rising, and the diversification of the power grid gives them more options. Furthermore, they can use websites to compare energy business electricity suppliers. Then they can quickly and easily determine which power company is right for them. More energy comparison sites are allowing consumers to choose renewable energy providers over conventional ones and often without paying more for their power.
Another disruptive technology is the internet of things, or smart grid. Smart networks allow power generators to closely match the current power demand instead of generating excess power that gets wasted. Smart power grids also allow for the creation of local or regional energy networks. This gives those producing excess the power to sell it on the market.
Smart meters and distributed sensor networks let businesses track energy usage across the entire facility. This helps businesses understand their usage and better manage their demand. It can lead to significant energy savings without affecting operations. Progress with regard to energy efficiency has been made, but there is still much that can be done.
The decentralised model of power generation and transmission gives businesses more insight into the energy market. It gives consumers more insight into where their power comes from and the information that they need to negotiate better rates.
The energy market is becoming more fragmented and complex. However, it is becoming more eco-friendly while new opportunities are appearing for consumers and producers alike.
