Signs of Change in the Green Energy Market?
Historical moment in green energy investment: Why now is the time to give the people power
After 170 countries signed the Paris climate agreement in 2015, it was widely understood that to reach the climate goals and keep the global temperature increase well below 2 degrees, investments in the fossil fuel industry must fall to 40% by 2030. What is of great concern is that last year we took a major step backwards with an increase in the share of investments in fossil fuels-based energy.
New investments favour fossil fuels
In 2017, investments in renewable energy were down by 7% compared to the previous year according to the International Energy Association (IEA), with a similar trend expected in 2018. This means that for the first time since 2014 the scales have tilted towards fossil fuels in terms of new investments.
Historically, energy resources have often been the cornerstone of a country’s development. Energy has also been a large contributor to most of the recessions. Here the IEA presents us with yet another worrying signal: last year’s investments into the whole energy sector dropped by 2 percent globally.
What’s causing the shift?
In order to better understand the dynamics of energy market transition towards greater sustainability, key influencing factors need to be identified. Ever since the start of the global green movement, the driving factors behind this transition were governmental support, technological development and economics.
A few years back, Europe was at the epicentre of all things related to green energy and sustainability however economic and immigration factors have led to a change of focus for many governments. This combined with the US decision to pull out of the Paris Agreement has been devastating to renewable energy investments.
With the population becoming more aware about the environmental and economical issues caused by global warming — the mindset and willingness of individual businesses to support this is now going to be the most important factor in the transition to renewable energy.
Australia could be leading the way
Old coal-fired plants shutting down, the growing demand for power supply causing an increase in conventional energy prices, and rapidly decreasing renewable energy prices has resulted in more cost-effective and readily available renewable energy sources.
Australia’s power operators are calling for an upgraded and interconnected National Energy Market (NEM). The goal of such a network would be to ensure a reliable, stable energy supply at the lowest possible cost. Economic and environmental factors would result in this system being based on renewable energy.
If the current pace of green energy development keeps up, Australia is looking at least 30 percent of its total electricity generation coming from renewables by 2020.
Besides networks themselves, the importance of user-friendly tools to support the increase in energy digitalisation cannot be stressed enough. Financial tools that provide business consumers with direct access to energy producers in a simple, transparent and non-constraining way are already emerging — although the real game changers will soon be being presented by third-party players such as WePower.
With energy digitalisation rapidly emerging, such energy networks will be required to support easy energy trading mechanisms, ensuring energy availability at the best price at any given point in time, as well as the ability to sell it.
WePower’s platform will allow business energy buyers to purchase green energy directly from producers, using virtual power purchase agreements (PPAs) and blockchain technology to ensure transparency, high liquidity and reliability.
The time is now
Taking influence away from governments and putting it into the hands of individuals is the only way forward but the question is how fast can we do it and will it be fast enough?
In the age of the empowered energy buyer, who has the ability to choose which energy to buy, from whom and when, the future of our environment and economic stability looks much more optimistic.