The future is electric

The future is electric

The energy transition: a well-discussed topic that is often announced in the media as coming soon. Actually, we believe this transition is already ongoing for twenty years. Due to the fact the government is responsible for this transition the process is quite delayed. Furthermore, a lot of big corporates do not desire a transition. This could affect their market share and also their market proposition.

Therefore the transition should be a revolution, initiated from the consumer. To make this happen, the price of sustainable energy is relevant. The transition could speed up if sustainable energy is the most profitable option from an economic point of view. Luckily, the society sees more and more that they can have an influence on the transition. Because, in the end it is up to us to stimulate the world to become more green.

Elements of an energy transition
The energy transition should be seen as a chance for new revenue models. Important elements in the energy transition are batteries and solar panels. As a result of the decrease in the price of solar panels and batteries, it is an easier task to create the right revenue model. Especially the decrease in price has been estimated wrong in the past years. In fact the prices decreased much faster than expected. This is an important matter, because as the price is decreasing, it is economical smarter to change over to sustainable energy and set this revolution in motion.

Price reduction of batteries
In the last years, the prices of batteries decreased around 7% a year. Investment bank Goldman Sachs expects the prices of a Lithium Ion battery to be 60% lower as they are now. This means the price will be around €150 per kWh. This is all good news, because a low price means a lower barrier to purchase batteries. These batteries increase the possibilities in flexible company processes and sustainable energy storage. Moreover, the government could help a lot by stimulating the use of electric cars. With the combination of the low battery prices, it could be realistic to have one million electric cars in the Netherlands in year 2025. To verify, this equals 6GW capacity in battery storage per hour

Price reduction of solar panels
Besides batteries, the prices of solar panels also decreases incredible fast. In the USA they announced prices of solar energy that were cheaper compared to energy from traditional power stations. In Austin for example, solar energy is available nowadays for €0,035 per kWh. This is a lot cheaper than traditional power stations, especially compared to nuclear power stations!

Golden future combination: flexibility and batteries
So, how far can the price reduction go? Based on the knowledge we have nowadays about solar panels, it is a realistic estimation to say that the price will be halved at least. It is already favorable to gain your own solar energy in the Netherlands. This effect will be increased if the price of the panels itself is reducing as well, related to the payback period which will also be shortened. The amount of solar panels will definitely rise which has a downside of a less stabile grid. Solar energy is unpredictable, which causes the imbalance. The necessity for flexible company process and storage therefore becomes greater, since they can restore the imbalance.

Fortunately, batteries become lower in price, which encourage the combination of flexible company processes and batteries to gain a balanced energy grid empowered by sustainable energy sources.

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