Previously I have written about the changing shape of regulated utilities, the onset of local demand supply balance, what that might mean for the regulated wires businesses and the impact of potential stranded assets. I am convinced on the evolutionary journey there is a position where we can accommodate as much local supply demand balance as is physically possible, and at the same time our regulated network infrastructure continues to be funded.
There are two main reasons for the funding of the network infrastructure;
- It provides the local network to enable local supply/demand balance and as a consequence the backbone of local power markets
- It provides the ultimate secure connection to national sources of supply should all else fail
The shift in market structure to reflect these sentiments will emerge over the next decade, and what will drive this will be ultimately customer choice, through influencing government policy, and also by responding to the new market offerings available.
To examine some of the new market offerings available – have a look at a German example, http://blogs.scientificamerican.com/plugged-in/peer-to-peer-energy-trading-dreams-of-being-bigger-than-e-on/; as well as a pilot arrangement taking place in the UK, https://www.openutility.com/. Both of these are examples of the new wave of activity which will make our energy markets of the future. This shift is occurring, it will be by way of evolution rather than revolution. In 20 years we will be able to look back and see the transformation from where we are today. Will you be someone who drives this change, or will you be someone who holds on to the status quo?