Access to energy is one of the greatest barriers to building an inclusive world. Government and business need to act now.
Electricity and inclusiveness are intrinsically connected. It’s a struggle to go to school without energy, or to cook a family meal and live in warmth and safety. Yet, according to the World Bank, more than a billion people in developing countries still live without any access to electricity. Meanwhile, energy poverty is a rising issue in many more mature markets.
One of the key themes at this year’s World Economic Forum (WEF) is the energy system of the future and how it will be influenced by urbanization, innovation and shifts in high-growth energy demand from developed to less-developed countries. Indeed, making affordable power accessible to everyone is a dilemma that has long preoccupied governments, philanthropists and organizations such as the WEF. But progress toward achieving this has been incremental and slow.
Now, the rapid digital transformation of the global energy market may finally offer the opportunity to address electricity injustice. But for this to become a reality, the right regulation and policy signals will be critical if we are to make the most of what may be a once-in-a-generation opportunity.
Change is coming – fast
Sweeping change across the energy sector has been on the horizon for some time. More renewables, cheaper battery storage options, a powerful consumer culture and digital technology are now converging to create a perfect storm of disruption in our industry. And every aspect of energy delivery and provision – how we generate, use and sell electricity – is undergoing a radical and irreversible shift.
But until now, a lack of clarity about exactly when change will occur has hampered efforts to prepare for and realize the potential of a different energy world.
With this in mind, EY has worked with a leading global analyst house to determine exactly how and when the impact of 10 different technologies will converge to make grid parity a reality – making it as cheap for consumers to go off-grid as it is to stay on it. The results were startling.
The research estimates that in Oceania go off-grid energy will reach cost and performance parity with grid-delivered energy by as soon as 2021. In Europe, everything is set to change by 2022. And in the US, where the energy sector is highly regionalized, change will materialize later – initially by 2028 in California and 2031 in Northeast states.