As with other sectors, Brexit complicates the picture somewhat—but we should be optimistic about the UK's place in the energy market
by Duncan Weldon / August 1, 2018 / Leave a comment
There are opportunities available—and the UK could harness them. Photo: Max Pixel
The energy market is being radically reshaped by economic and technological change. Against this backdrop, Prospect have recently convened a series of round tables with Centrica to discuss how the future might evolve and to examine the prospects for UK exports at a time when Brexit is focusing minds upon the UK’s balance of payments.
Three major factors are driving change. Firstly, consumer choice is on the rise. Compared to the situation a couple of decades ago, consumers are now more likely to shop around and switch energy provider.
Compounding this is the second driver, the rapid advance of digital technology and the growth of “smart home” devices and the wider “internet of things.” Increasing numbers of consumers are taking far more control over their energy usage and are much better able to monitor. Taken together, this represents a potential large rise in consumer power.
Alongside this change in consumption patterns is a change in production. The growth of renewables and the wider awareness of climate change targets combined with new technologies on the production side are beginning to drive a shift away from asset heavy, legacy methods of generating power and towards smaller, more asset light, more local types of power generation.
The potential growth of battery storage capacity could push more generation down this route. An even bigger potential catalyst for change could come with the more wide spread use of electronic vehicles.
At time of flux, regulation and policy is often struggling to keep up with the pace of change.
Centrica believe there is a large potential for the UK to grow exports in this changing market. This is less about manufacturing and more about expertise and technical know-how. In some of the larger emerging markets, there is the potential that energy grids will leap frog those of the more mature economies. An economy which never really developed the asset heavy, centralised grids (still common in the West) may instead move straight to the stage of more local, smaller grids and markets.
The UK, alongside its developed market peers, is well placed to offer the technical guidance to run and design such systems. Whilst the UK is unlikely to able to compete on manufacturing costs, it can certainly compete much higher up the…
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