London-based Institute for Public Policy and Research (IPPR) was reportedly the first to influentially call for limiting greenhouse gases to two degrees Celsius. Now it’s calling for the immediate replacement of obsolete utilities with distributed energy.
“The U.K.’s current policy framework is faltering because it is propping up the large-scale, centralised utility business model, which is dying,” IPPR’s new report A New Approach to Electricity Markets (PDF) explains. “Now a range of distributed electricity technologies exist that hold the key to a cheaper, cleaner, more competitive and secure electricity system, that works better for consumers.”
In order for these innovations to achieve their full potential — specifically solar, which IPPR correctly calls “the most disruptive distributed generation technology” — the U.K. needs to reroute its aggressive policy and subsidy support for dirty fuels (including nuclear) to the emergent cleantech that institutional investors like Citibank, Sanford Bernstein and more are already pricing into the future. IPPR’s study notes that Citibank has already predicted that the “rationale of the prevailing utility business model [is coming] under severe pressure and [could] potentially, ultimately, crumble,” and that distributed energy technologies will cut the utilities market share in half within 20 years. It also explains that last year the value of Europe’s top 20 utilities was also slashed in half, and that this year Barclays downgraded the bonds for America’s entire utility sector. The writing is on the wall.
Meanwhile, U.K. solar is growing, fast. Solar could hit grid parity in the U.K. by 2020, leading IPPR to emphatically suggest the U.K. step up its efforts to prioritize and subisidize cleantech over dinosaurs.
It’s not for nothing that U.K. farmers are solarizing, while the “Green Agenda” is becoming a major political talking point of the 2015 elections. Wake up and smell the Earl Grey, people.
“The government must immediately begin work on a strategy for accommodating large-scale deployment of solar power into the electricity system so that Britain is not prevented from capturing the benefits this technology has to offer,” IPPR recommends. The capacity market should be “scrapped,” feed-in-tariffs should be implemented and the government regulations should quickly be reformed to “unlock barriers to deployment of distributed electricity technologies and accelerate the development of the smart grid.” This means covering the costs of rebalancing an obsolete grid, without passing unfair taxes onto those looking to run on sunshine.
“A new technological paradigm in electricity has emerged,” IPPR concluded, ” and yet the U.K.’s electricity system remains wedded to the large-scale, centralised utility business model, which is rapidly being made redundant.”
If the U.K. has to fine or even revoke the licenses of its Big Six utilities for arbitrary prices, overcharging customers, stifling competition and blocking what are obvious evolutionary changes to the national, if not international, energy infrastructure … well, that’s just how the scone crumbles, isn’t it?
This article appeared in Solar Energy
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