EY: The new energy world is approaching tipping points

EY: The pace of the global energy transition is accelerating beyond expectations thanks to technology advances, storage and digital innovation and more distributed generation.
Published: Thu 04 Jul 2019

EY and IDC researchers found that in Europe, the US, Oceania, the Gulf Cooperation Council (GCC) countries, China, India and Latin America, the tipping points which will trigger significant change will appear sooner than previously envisaged.

  • Tipping point 1: when self-generation reaches cost parity with grid-delivered electricity.
  • Tipping point 2: when the price of battery electric vehicles reaches cost and performance parity with traditional cars with internal combustion engines
  • Tipping point 3: when the mere cost of delivering electricity (i.e., the unit-cost of electricity transmission and distribution) exceeds the cost of self-generated electricity

“A revolution in the power sector is driving rapid change in renewable energy supported by digital technologies, the falling cost of battery storage, and empowered consumers,” says Benoit Laclau, EY Global Energy Leader. “These are quickly ushering in a new energy system, transforming our world into one where cleanly generated electricity will power almost every aspect of our lives.”

 

He calls on energy companies to be agile and take on a proactive role in the transformation of the sector. Renewable energy capacity additions outstripped conventional energy generation again in 2018 and innovations such as artificial intelligence and machine learning are now an integral part of the energy system, no longer emerging trends. The development of utility-scale battery storage is seen as a major turning point.

Other drivers include more ambitious national clean energy targets, renewable and behind-the-meter generation, and stakeholder action putting pressure on shareholders and investors.

“This research and analysis has resulted in a multi-regional cost parity model for the electricity industry that takes into account both distributed generation and storage, as well as several other enabling technologies. For those utilities that are actively rethinking their business model, the results of this research provide a concrete horizon against which they can benchmark their action. For those that haven't yet done so, the data provides one of the strongest calls to action," says Jean-Francois Segalotto, Associate Research Director, IDC Energy Insights.

The report can be found here: https://go.ey.com/2Yp1ved