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How will cleantech grow and evolve globally? - Cleantech Invest guest blog

How will cleantech grow and evolve globally? - Cleantech Invest guest blog

May 11, 2016
Energy & resource efficiency
Renewables & smart grid
Solar energy

We are on the crest of a wave of cleantech innovations that will fundamentally transform much of what we see around us today (and even more of what we don’t see).

This transformation will change our ways of consuming energy and the amount each individual needs, and it will also change the individual’s role from being only a consumer of goods and services to being a ‘prosumer’ with a positive impact.

A number of transitions are underway and I believe we have reached the point of no return

The electrification of transportation is a truly transformative change that is having (and will increasingly have) profound impacts on our economies, the health of our environment and our collective quality of life.

In the beginning, most people ignored those who understood the potential for EV’s and began developing the technology required to move the first people on 4 wheels without the need for fossil fuels.

Then, they laughed at those who invested even more into R&D and the all-important charging infrastructure needed to eliminate range-anxiety and give consumers confidence.

And more recently, the inevitable progress of EV’s has been fought against by fossil fuel companies, that have lobbied governments to refrain from subsidizing the roll-out of such infrastructure, as well as seeking to convince them that the world’s energy problems might be solved through the exploitation of even dirtier shale oil.

It is my opinion that while there will be a smaller role for biofuels (and maybe even hydrogen fuel cells and biogas) the mainstream will quickly move toward EV’s

Critics will point to the fact that EV’s are still only a small portion of the present fleet, but history shows us just how fast paradigms change; once the tide turns, a new technology paradigm takes over faster than anyone expects. I am positive that the economic historians will view the shale oil ‘bonanza’ as a desperate attempt to maintain the doomed cheap oil paradigm by a few vested interests.

The solar economy is taking over, and the future looks much brighter as a result

PV installations are already the cheapest and best options in many markets and technological advancements in battery storage will only make technologies that harvest the energy from the sun more attractive over time. Energy storage will play a major role in this development and it will quickly become ubiquitous (i.e. in households, commercial premises, office buildings, apartments, EVs as storage) and it will do so even faster than the rate at which solar grew in many markets.

New players will continue to enter the energy business, and those larger utilities that do not react to the changing nature of the energy market (from centralised and input-driven, to distributed and resource efficient) will diminish into a ‘reseller role’ or worse, as the valuable customer-centric and energy efficient services are developed by newer and more agile entrants to the market.

Infrastructure will be the ‘new information tech’, with EV’s and Tesla’s new home battery storage systems an example of this. In the not too distant future a typical household will have a roof covered in solar panels, a battery pack for night-time use, and an EV in the garage. Such a near-term reality provides plenty of opportunities for new service providers to value-add, as well as posing an existential threat to big utilities slow to innovate.

‘Prosumers’ will be in the driver’s seat of the Model 3 (or something else just as cool)

Ultimately, consumers will increasingly be the drivers for cleantech growth in all markets, and they will increasingly demand convenience, self-sufficiency and more control over their energy consumption and production.

The new normal for consumers will be: not having to spend time refuelling one’s car at a petrol station; home solar and battery systems insulating households from fluctuations in utilities’ pricing decisions; and IoT (Internet of Things) solutions providing consumers a detailed view of how energy is consumed at home and in appliances.

It should also be noted that for consumer cleantech, behavioral patterns such as peer-to-peer competition and ‘gamification’ will matter more and more in the future, with tremendous gains in energy efficiency as a result.

What these changes in consumer behavior and needs really signify is actually the beginning of the ‘death of the consumer’ as there will no longer be only ‘consumers’ of energy, but ‘producers and consumers of energy’ — we will enter the era of the ‘prosumer’.

Lucky for all of us, after the success of the Paris Climate Conference and the impending ratification of the new agreement by large players such as the US and China on April 22nd, climate change has officially ‘returned’ to the spotlight as a genuine market driver. Domestic renewable energy, energy efficiency and security will be top of the agenda for most countries moving forward if it wasn’t already, and China’s new five year plan put a particular focus on all of these areas.

In more general terms, emerging economies will ‘leapfrog’ western countries in bringing this new infrastructure to the market (as they did with great success in mobile telephony), and in these markets, ‘resilience’ will be equally as large a driver for cleantech investments as will cost savings.

While the growth of cleantech will not be a ‘one-size-fits-all’ across markets, the many transformations we are about to witness are inevitable and I look forward to doing my bit in seeing it take place sooner rather than later. The health of our planet depends on it, and the quality of life of ours and the next generations’ depends on it too.

I am looking forward to having you on this journey too.

An Op-Ed by Cleantech Invest Chairman Lassi Noponen.

Image: Savo-Solar

Source: Cleantech Invest

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