Watt next for the energy sector?

Written by Lori Campbell on 16th Jan 2019

With growth in renewable energy capacity surpassing fossil fuel capacity for the first time ever in the third quarter of the year, 2018 was a transformational year for the energy sector.

The year ahead is set to bring many more exciting developments – from increased uptake of green energy suppliers across the UK to further innovation in cutting edge areas including battery storage and hydrogen energy.

As one Good With Money reader hopefully ponders below, in the not too distant future carbon energy may seem as bizarre as plastic bags do today.

Green tariffs

In 2019, green energy will no longer be considered an expensive luxury. With the cost of renewables continuing to fall, green tariffs now account for many of the cheapest deals on the energy market.

Last year, half of the top 10 cheapest tariffs were green ones offered by challenger suppliers (such as Bulb, Ovo Energy, Yorkshire Energy and People’s Energy) taking on the big six, according to comparison site USwitch. In 2017, just two of the 10 cheapest were green.

Larger suppliers, which had retreated from green energy tariffs in recent years, have also begun returning to renewables. E.ON and npower now offer fixed green tariffs, though they cost much more than those offered by smaller rivals.

Hopefully in the future there will be a charge for using non-sustainable energy, like the plastic bag tax

Londoner Sara Bender, 36, told Good With Money that Bulb offers her the best of both worlds – green energy and a lower cost tariff.

She said: “I switched to Bulb a year ago mainly because it offers green, sustainable energy. But it also gave me a lower tariff than my previous supplier. I didn’t have to choose between lower cost and sustainability – I got both. There really is no reason now not to buy green energy. Hopefully in the future there will be a charge for using non-sustainable energy, like the plastic bag tax.”

Matthew Hill, who lives with his fiancee in Ashford, Kent, said he wouldn’t mind paying a bit more to know he is helping the environment.

He said: I changed to OVO Energy in February last year. The price isn’t that different to others. But I believe if you are really dedicated to changing the world, there shouldn’t be a price on using a greener energy supplier. OVO is investing a lot in renewable energy and, owning two electric vehicles, it seemed like the perfect energy supplier for us.”

Matthew, 26, now plans to get solar panels and battery storage installed into his home and try to use less energy from the grid.

 

Home batteries

The feed-in tariff (FIT) scheme, which pays people for generating their own electricity, is one of the UK’s most successful climate change policies to date. The government is now keen to see the industry stand on its own two feet, subsidy-free, from April 2019. This will see a shift from exporting energy to the national grid to people maximising self-consumption in their homes.

We can expect a big increase in the take-up of home and office battery storage this year to enable the change. EDF Energy is building a network of small-scale home batteries, which can be charged in off-peak times at night and used in the day.

Electric cars

We are now starting to see the second generation of battery-powered vehicles, with improved affordability and a decent range between charges.

While the first models, with the exception of Tesla, could manage around 100 miles, most new ones now offer 200-300 miles. The market is set to boom in 2020-21 but we’re likely to see more electric vehicles on the road in 2019.

Electric car sales far surpassed expectations in 2018. Sales are expected to reach 2.1 million in 2019, up 64 per cent from 2018. This will take the total number of plug-in vehicles on the roads to about 5.4 million.

This year will also see ultrafast home charging becoming more popular. While a typical home will take about 8-10 hours to fully top up a car (with a 3KW socket), some new public chargers can do that in about 10 minutes (using a 350KW charger).

Hydrogen

Companies like ITM Power will continue to make huge progress with the use of hydrogen – a zero emission fuel when burned with oxygen – in 2019. While full deployment of hydrogen is a way off, some big moves will be made this year. In November, John Gummer, chairman of the Committee on Climate Change, said: “The government must now decide whether it wishes to develop a UK hydrogen option. Taking decisions now will see the first deployment in the 2020s.”

Blockchain

Blockchain provides many clean energy opportunities, most notably by enabling peer-to-peer renewable energy trading. This allows us to buy renewable energy from friends, neighbours and anyone else who’s selling. UK energy start-up Verv is already making big strides by incorporating blockchain into its smart hub. Its ground-breaking energy trading platform provides affordable access to low-carbon energy.

With so many developments to watch, 2019 is set to be a pivotal year for the sustainable energy sector.

Nuclear fusion

Nuclear fusion, the same process that powers the sun, has long been heralded as an answer to our energy prayers with its promise of providing unlimited clean energy. Several start-ups are now saying they can make fusion a viable commercial reality. 2019 might be ambitious, but with companies like Tokamake Energy pioneering ways to harness nuclear fusion, some interesting developments are on the horizon.

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