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Global Futures Report 2013

73 Investment and business models Will utilities lead, follow, push back, or perish? With increasing levels of renewables, the business models and revenue streams of many existing energy companies are coming under stress. How will existing energy companies respond to that stress? Some utilities simply may no longer be viable, said one expert. Many experts believed utilities would rise to the challenge. However, not all were certain that utilities would lead.15 (See Great Debate 6, page 34.) 10. "Business Models" 11. “Energy Companies” What roles will oil and gas companies play? Will oil companies be major players in future renewable energy markets? Oil companies are positioning themselves as biofuels suppliers and investors in other forms of renewables. Some experts believed that offshore logistics capabilities will mean a major role for oil companies in offshore wind power. Due to the complementary fit of natural gas and renewables, experts foresaw greater involvement by gas companies.16 (See Great Debate 7, page 35.) 4. “Energy Systems” 11. “Energy Companies” Are existing sources of finance set to reach their limit? To what level of annual investment in renewables can bank lending, private equity, and utility balance- sheet finance reach, before new sources like pension funds, sovereign wealth funds, and others will be needed as central rather than peripheral sources? Some finance experts believed that attaining higher investment levels would require major involvement from such new sources.17 (See investment in Chapter 3, page 33.) 9. “Investment” Will green power purchasing scale up like organic food has? Green power sales are setting new records but are still a tiny fraction of total power sales. Will households or companies dramatically scale up their purchases from green power suppliers? Corporate governance is trending toward climate neutrality and greater green power purchasing, but at some point do other investment models become more significant than green power?18 (See Great Debate 8, page 37.) 10. “Business Models” Which business models will best suit offshore wind power? Some experts believed that further cost reduction and a quantum leap in market size are contingent on new business models emerging that recognize that a majority of project costs are not for the turbines themselves, and that long-term operation and maintenance costs present the biggest investment risk.19 (See business models in Chapter 3, page 36.) 10. “Business Models” 29. "Wind Power" Country/region-specific debates How soon will solar PV markets surge in China? Until recently, virtually all solar PV production in China was exported, with a very small domestic market. Since 2010, emerging new support policies have led experts to believe that a surge in domestic solar PV markets was “just around the corner.” Many linked market growth to further policy development, while others saw solar PV cost reductions driving new markets.20 (See China in Chapter 5, page 47, and solar PV in Chapter 6, page 56.) 24. “China” 28. “Solar Power” What is the future of coal power in India relative to renewables? Experts believed that a key choice facing India will be whether to increase imported coal for power generation, or to turn increasingly to renewable energy for the majority of new power investment. Some said this question depends on the availability and price of imported coal; others linked it to the imperatives of GDP growth.21 (See Great Debate 10, page 49.) 2. “Cost Comparisons” 4. "Energy Systems" 25. “India” Should (or will) Europe, the Mediterranean, and North Africa evolve a “super grid” that links these regions and distant renewable resources? Some European experts advocated for a strong “super grid” across Europe to more strongly link different resource regions and provide balancing. Some also advocated for the so-called “Desertec” project to develop renewables in North Africa linked through new grids back to Europe.22 12. “Power Grids” 21. “Europe”

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