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Electricity system being reshaped by solar energy, batteries and electric cars

Will solar, batteries and electric cars re-shape the electricity system?, UBS, 20 July 16, 

 Batteries and solar at the tipping point: Electricity users will become generators Solar systems and batteries will be disruptive technologies for the electricity system. Steeply declining battery and solar system costs will enable multiple new applications. In this note, we focus on the impact on the utilities and auto sectors. Our proprietary model suggests a payback time as low as 6-8 years for a combined EV + solar + battery investment by 2020 – unsubsidised. We see Europe, and in particular Germany, Italy and Spain, leading this paradigm shift due to high fuel and retail electricity prices.

EVs entering the mass market, battery demand could grow exponentially We forecast a c10% EV and plug-in hybrid penetration in Europe by 2025. While the initial growth should predominantly be driven by incentives and carbon regulation, the entry into the mass market should happen because EVs will pay off. The expected rapid decline in battery cost by >50% by 2020 should not just spur EV sales, but also lead to exponential growth in demand for stationary batteries to store excess power. This is relevant for an electricity mix with a much higher share of (volatile) renewables.
Opportunities for utilities: Customers, smart grid and decentralised backup In this decentralised electricity world, the key utilities’ assets will be smart distribution networks, end customer relationships and small-scale backup units. Utilities should be able to extract more value in (highly competitive) supply activities, as customer needs will be more complex. Large-scale power generation, however, will be the dinosaur of the future energy system: Too big, too inflexible, not even relevant for backup power in the long run. Overall, sector EPS could grow 13% by 2025 on capex and higher-margin supply businesses, but differences between the companies should be large……..http://www.qualenergia.it/sites/default/files/articolo-doc/ues45625.pdf

July 22, 2016 - Posted by | energy storage, renewable

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