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One of the ongoing features on this blog is related to the investment in the energy market. The renewable sector, within the energy market, has expanded due to the increasing demands of environmental directives (from the supra-national organisations such as the European Union and international protocols). Across Europe you can see companies investing in various renewable sources such as solar energy and off shore wind technology. The Net Present Values (NPVs) of these projects are very attractive because they often receive incentives. Incentives, from national governments, are used to encourage growth in this area because it helps to achieve the national targets to cut emissions.

 

However, the sudden growth in renewables has created new problems. Chazen (2014) reported that in Bavaria one village invested so much in solar panels that they are able to generate three times the required amount for that area, thus locals sell the spare capacity to the grid to produce a revenue stream. Although the villagers are benefitting from their investments it is creating an imbalance in the electricity system and those responsible for balancing the energy for the entire country are having to re-think their energy strategies.  The investments by individuals in the village have instigated new experiments in the form of smart grids to analyse the best way of managing the growing number of consumers investing in energy generation.

Information on the Bavaria village and their investments can be found at:

Chazen, G. (2014) Innovation in energy. www.ft.com published 17/1/14 last accessed 21/1/14

 

 

 

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