Four Things on Every Power Nerd's Mind Going Into BNEF's Summit
(Bloomberg) -- How much will electric cars eat into oil consumption? One day, will electricity be free? Oh, and what’s the deal with blockchain?
Here are the four things on everyone’s minds going into Bloomberg New Energy Finance’s Future of Energy Summit in New York this week:
Out of Gas
The prospect of peak demand and the proliferation of cheap renewable power has Big Oil thinking more carefully about its future in a low-carbon economy. European giants such as Total SA, BP Plc and Royal Dutch Shell Plc are increasing their bets on green technology, such as electric car-charging stations. Still, it’s pretty clear that every EV on the road has a driver who’s bypassing the gas station, and that’s going to curtail demand for about 8.5 million barrels of transportation fuel a day by 2040. BP Chief Financial Officer Brian Gilvary is scheduled to discuss the company’s views on the energy transition at the event.
Electricity markets across the globe have been upended as a flood of wind and solar power drives down wholesale costs. Sometimes there’s so much clean energy on the grid that prices fall below zero. That’s not necessarily as good as it sounds. Market planners are evaluating ways to make sure fossil-fuel and nuclear plants still get compensated adequately. Some operators say they can’t afford to run traditional power plants, and if they shut down, what will keep the lights on after the sun goes down? “The next great step is reconsidering how everyone gets paid for the energy that gets made,” said Ethan Zindler, head of Americas for Bloomberg New Energy Finance.
President Donald Trump’s import tariffs on solar panels, steel and aluminum will drive up the cost of U.S. clean energy. At the same time, the availability of cheap money that helped fuel billions in green investments could be coming to a close as central banks raise interest rates. BNEF expects these factors to put a dent in the industry -- the question is how big will it be?
Blockchain? What’s That?
The buzzword this year is blockchain, but there’s also a lot of uncertainty. How exactly can a distributed ledger for managing transactions help the energy industry? The technology has the potential to disrupt centralized power markets, letting people trade solar power directly with each other, for example. And utilities see blockchain as a potential way to handle decentralized power sources like rooftop panels and batteries. There’s a lot of headroom, and that’s starting to attract investments to develop new applications.
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