A solar energy farm being built in Yantai, Shandong Province of China Paying for electricity could soon become a thing of the past if analysts at Citi, a global investment bank, are to be believed.
Researchers at the bank have calculated that cheaper storage and smart data analytics may soon make solar and wind energy available to consumers in some parts of the world – completely for free.
“Now, Big Data and advanced analytics are developing rapidly to improve forecasting, automation, customisation, and the democratisation of energy.
The end result is that we are producing more energy with fewer resources,” the researchers said.
Researchers said free energy would first depend on a company using big data to study how much electricity people use, and when, and then building a platform not unlike eBay of Alibaba so that energy providers can bid to provide energy to those customers, driving down prices.
Data is so important because it means electricity providers can work out how to store and distribute energy generated from solar panels and wind turbines.
While renewable energy sources like these have been around for years, but storing and distributing electricity from these unpredictable sources has been a major barrier to using them more effectively.
While free energy might not be a reality, there are signs that renewable energy is disrupting the dominance of the biggest energy suppliers in the UK.
Bulb, a start-up energy provider that launched in May, cuts across the confusing tariff system of the big companies by offering one tariff, 100 per cent renewable energy and prices on average 20 per cent cheaper than the big six. Bulb is challenging the big energy companies that dominate the UK market by offering to pay exit fees for consumers that want to switch to them.
Jonathan Gartside, director of product and operations at Bulb, said that future of energy will be technology-led, renewable and cheaper.
“With so much innovative technology being developed the role of the supplier has to change. Consumers need trusted, forward thinking suppliers – unencumbered by legacy systems and centralised generation portfolios – to help them navigate and capitalise on this exciting potential,” he said.
It’s not only a new breed of supplier that is excited about changes to the industry. There are signs that big software companies are ready to capitalise on big changes to the market.
Microsoft has developed its own software that collects 500 million data transactions daily from sensors and other energy devices to understand its own energy demand level and patterns.
Google and Apple both have licences to trade electricity.
“As new builds in the power sector involve more near zero-variable cost sources, such as wind and solar, along with greater demand and storage optimisation, the goal of dramatically lowering energy costs for all, with the possibility of free energy in some corners, may finally come to fruition,” the Citi analysts said.