Sir, Amory Lovins (Letters, April 14) is absolutely right. It is time to recognise that inflexible baseload power is something that our future energy system doesn’t need. Fossil fuel baseload is a dinosaur and a fallacy.

The future of energy is complex and smart. We can integrate generation, interconnection, demand-side management and storage (both large and small) to match demand cost-effectively. We are quickly moving away from a centralised electricity system, with a few large power plants, to a more decentralised and democratic system involving small-scale generators and thousands of individuals. Consider that German citizens built a staggering 3,000Mw of solar PV — the equivalent of six coal-fired power plants — in just four weeks in 2011, mostly on the roofs of their houses.

The cost of solar PV is now lower than grid electricity, steadily pushing the traditional utilities out of the market. No wonder solar and wind power is the fastest-growing provider of new generation capacity in the world. Once installed, it is used first when despatching power because it has already been paid for.

With increasing decentralisation comes demand for decentralised electricity storage. Thanks to the falling cost of lithium-ion battery packs (expected to be less than $200/kWh in a couple of years) we are at a tipping point. Batteries can be stationary as standalone storage systems or mobile in electric vehicles and will soon be competitive against the internal combustion engine. GM recently announced a supply contract with LG Chem for delivery of lithium — ion cells at a cost of $145/kWh which translates to $210/kWh for battery packs. And in stationary applications, the cost for a battery would be even lower, enabling networks of energy storage substations and home batteries to store renewable power. When we do it right, our new energy system can be cleaner, smarter, more efficient and much more reliable, without increasing cost. However, instead of holding on to old paradigms, we need to open our eyes and embrace new technologies.

While the utility companies have been slow to adapt — as their plummeting share prices attest — these dinosaurs might not all become extinct because they still hold a key asset: customers. They could provide solar PV and home energy storage to their customers, sharing the savings and providing a professional full-service offering. However, not all utilities
will survive in the new sustainable energy world.

Frank Wouters

Gore Street Capital,

London SW3, UK

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