In the third of a series of predictions pieces running on Current± over the coming weeks, Vattenfall’s Danielle Lane and Current± editor Liam Stoker predict what may happen in the energy sector in 2019.
Danielle Lane, UK country manager, Vattenfall
With the ink still drying on the COP24 rulebook, the UK’s ambitious drive to decarbonisation will continue. We expect the IPCC evidence to prompt the UK Government to pledge next year net zero carbon by 2050, along with the Scottish Parliament passing that same commitment into law. This is in line with Vattenfall’s own commitment to be free from fossil fuels within a generation.
We know there will be CfD auction rounds for offshore wind (and other less established technologies) in May. If prices come in under £50 we can expect massive interest from media and policy makers. With sound economic fundamentals, offshore wind surely has impeccable growth credentials. Tie the good cost story into Crown Estate and Crown Estate Scotland leasing rounds in 2019, and we could see offshore wind secure its place as the key technology for clean growth in the UK.
In low carbon district heating, and on the back of the UK government’s heat network funding, the sector should see a flurry of tender wins through 2019 promising some major urban deployments in the 2020s. Whilst standard in Europe, these new, smart UK networks could well be the major disrupter in the UK’s heating sector.
Vattenfall also has interest in UK electric vehicle charging with its InCharge business. Perhaps it’s easy to say that in 2019 the growth in the number of EV driving motorists will accelerate. Nonetheless, we wouldn’t be surprised if new plug-in car registrations in 2019 crosses the 5% threshold for the first time.
That, along with the electrification of heat production, will signal the start of the UK’s electric future.
Liam Stoker, editor, Current±
A major tech or telecommunications firm will enter the UK supply market
This has been mooted as a possible occurrence for some time now, however 2019 feels ripe for a significant new entrant into the UK supplier market. There’s been some serious shake-up in the sector in 2018 as the likes of Bulb, Octopus and OVO have grown strongly as consumers leave the Big Six in their droves, while smaller suppliers have had a rough time of it. Tech and telecoms firms seem a perfect fit for a sector that’s drastically being reshaped by emerging technology, with a shift away from commodities and towards customer services. Should that launch come amidst a bundled service – power, broadband, entertainment from one, helpful provider – then that could make for some serious head scratching at Ofgem.
Subsidy-free utility-scale renewables will take off
This may not be much of a surprise to readers of our sister titles Solar Power Portal and PV Tech, but 2019 looks almost certain to be the year subsidy-free solar, and other renewables for that matter, explode. Our own in-house market research team has steered towards 500MW of subsidy-free solar being deployed in the UK alone in 2019 (and we wouldn’t be surprised to see that figure beaten, and comfortably) as prices continue to drop. With Iberia, Italy and a host of other markets also either readily deploying grid-parity renewables or approaching it, it’s a strong bet for renewable power to experience a real turning point in 2019.
There will be further consolidation/M&A in the EV charging space
In the last year we’ve seen the likes of BP, Shell and Total make EV charging plays, but one of the most pressing themes at our EV Infrastructure conference this summer was how this trend of M&A and consolidation is expected to continue, especially within charging networks. It’s also very unlikely to remain dominated by O&G giants as utilities and auto manufacturers begin their involvement. Given the obvious benefits of scale in what remains something of a margin-based market, it would not be beyond the realms of possibility to see the space dominated by four or five sizeable players.