Energy system transformation – the business perspective
Energy system transformation is a business like any other. Finding new ways of generating and distributing 1000 TWh of energy will take an investment of € 1000 billion. That equates to a maximum of € 33 billion in annual investment over a period of 30 years.
On the other side of the balance sheet is the € 87 billion or so that we spend every year on our primary energy imports (oil, gas, coal, uranium). At some point during these 30 years, we will have replaced so much of this energy through our own domestic generation that our spending on imports will fall to around € 54 billion. From that point, our energy generation costs will drop below the current level. And from then on, they will decrease dramatically.
The diagram shows the investment phase and the reversal of financial flows resulting from savings effects. The curve does not take into account that investments will also lead to the creation of operating resources which will generate further financial flows.
Every businessperson knows how to turn this type of curve into a viable business: by recouping investment costs through future pricing policy. Ideally, the businessperson in this instance should be the state itself, with pricing policy being the ultimate outcome of a political consensus on the financial planning timeframe.