The pace of change in Europe’s energy sector has never been faster. New technology is one of the drivers, but that in turn is being driven by environmental, economic and other concerns as the countries of the European Union commit to greener energy production.
Electricity will certainly play a more prominent role in future because we can most easily remove carbon from the supply-side of the energy equation by moving to less carbon-intensive power generation, and by delivering more of the energy we need via our electricity networks.
Today most of our electricity is generated by large power stations located in remote places, then transported over long distances to where people need it. Tomorrow’s more dynamic networks will be radically different. They will feature lots of distributed generation, where smaller-scale generating systems are “embedded” within the power grid. There will be lots of load-management features and computer software. To put it another way, these networks will be a lot more intelligent; they will become Smart Grids.
The cost of installing this smart infrastructure is beginning to be understood. But it is hard to compare the various estimates currently in circulation because they use different methods of calculating additional expenditure over and above “normal” building and refurbishment costs. Following some detailed work in Ireland, I estimate the additional costs involved with making our energy infrastructure as smart as we need it to be will be in the order of €1 trillion for the countries of the EU.
Can we afford this investment in the medium term? Certainly, both state-owned and private electricity companies say their normal financing routes will not be up to the task. But rather than asking the flippant question “Can we afford not to do it?” I have carefully examined the “business as usual” scenario for Ireland.
Amazingly, the overall cost to society is almost exactly the same whether we make this investment or not. The difference is where these costs would fall, and governments will have to deal with that. But the point is this: society at large does not bear additional burdens by getting smarter with our energy infrastructure. And the good news doesn’t stop there. Europe is very good indeed at all the engineering that goes with this smart, new infrastructure.