New data was just released by the global consultancy, PwC, in which there are interlocking concerns for the future of electricity throughout Europe and the entire world, for that matter. Because there is an ever increasing demand without the capacity to produce more electricity, prices are skyrocketing and the problem is forecast to worsen if serious changes aren’t instituted quickly. At the heart of concerns expressed by PwC are governments’ policies and financing in regards to increased/improved generation of power.
Increasing Demand
The survey conducted by PwC forecasts that there will be at least an 84% increase in the amount of electricity consumed within the next quarter century. Their findings indicate that this increased consumption will be the result of urbanisation, growth in population and advancements in technology. One example cited is the expected transition to electric and/or hybrid vehicles. All of these factors are interwoven which intensifies concerns for an ample supply and the report advises that countries around the world can expect a higher number of blackouts until the problems can be dealt with.
Financial Conundrum
At first glance, it would appear as though such an increased demand for electricity would arouse the interest of investors in alternative sources of power, but in this case the opposite holds true. This is the financial conundrum which the report seeks to answer. It is all tied into higher costs which are forcing many countries into ‘fuel poverty.’ Investors are sceptical as to whether or not there will be a return on their investments as consumers, businesses and nations will be unable to pay the higher prices of electricity along the way. Of those energy executives surveyed, the majority are looking at marine technology and offshore wind as the most cost efficient alternatives to fossil fuel and this is where policy may best be focused.
Uncertainty in the Future of Government Polices
PwC feels that governments are stagnant in policies on energy efficiency and affordability. Whereas this may not be a problem in some areas of the world, it is especially significant in Europe as there are many countries which need to agree on an agenda. Some governments are against nuclear power whilst others are not in a position to utilise alternative sources of fuel such as biomass. There is still a great deal of controversy as to how the supply can be increased and until an agreement on policies can be reached, Europe is in a virtual gridlock on these concerns.
The PwC head of UK power and utilities, Steven Jennings, believes that all of these concerns have translated into apprehension about the security of available energy. Infrastructure and affordability must be addressed simultaneously in order to ensure that Europe will move forward towards an increased supply of electricity. As policies change, investors might be enticed to fund technology but that still doesn’t address the problem of ‘fuel poverty.’ If consumers aren’t able to afford electricity and are unable to pay their bills, investors are still left wondering how they will make a return on their investments