Research by Swiss investment bank UBS predicts that the cost of using solar energy to boil a kettle could be so cheap by 2030 it will effectively be free. Whereas boiling a kettle using solar costs GBP0.01 today, by 2020 they estimate this cost would be around GBP0.005.
Wind and solar power are becoming less reliant on government subsidies in many parts of the world. This means renewable energy can grow at the pace of technological development rather than that of ministerial whim.
A new funding model in the UK – where energy companies must compete for subsidies in auctions – has halved the cost of offshore wind in three years, as well as increasing the level of innovation and efficiency beyond expectations.
Giant corporations such as Amazon, Apple, Google and Walmart have already begun building or buying their own solar and wind farms in an effort to operate fully on renewable power – in some cases selling their surplus back to the grid. This reduced dependence on traditional suppliers is likely to shake up the energy market, as will new, responsive pricing models based on artificially intelligence approaches to analysing usage.
Communities could one day become self-powering. In the UK, Nottingham City Council has set up a non-profit renewable energy supplier (called Robin Hood Energy) to tackle fuel poverty. Beyond physical communities, virtual groups of people can sell surplus energy to one another, bypassing energy companies – for example, Sonnen Energy in Germany.
Demand for electricity is likely to rise as we rely evermore on electronic devices: smartphones, machines connected to the ‘internet of things’ and electric cars, among others.
Fuel poverty is a worsening problem in the UK, with the gap between energy costs and affordability widening for the country’s poorest households. Inability to afford electricity and heating are aspects of destitution, and these are compounded when people must decide whether to trade-off food to cover their bills. Some older people on low incomes struggle to heat their homes during winter, increasing their risks of respiratory illnesses and death.
The idea of renewable energy being so close to zero that is effectively free is likely to be bluster. Ever cheaper electricity could increase demand, which is bound to increase almost regardless of price. Although demand for electricity will increase, our overall energy consumption should fall.