“Changes are happening so rapidly regulators are not managing to catch up”

As an interdisciplinary academic with background in management, environmental sciences and energy engineering, Dr. Konstantinos Chalvatzis is a trust-worthy voice in the renewable energy studies. He is an associate Professor in Business and Climate Change at Norwich Business School, and the Tyndall Centre for Climate Change Research. Besides, he holds lectures at the University of Maryland and Università di Bologna as an adjunct professor. We have had the chance to talk with him during his last stay on Italy about the energy industry, labour market and education.

What do you consider to be the main brakes to the renewable energy industry?

So the main hindering things to having proper growth in the sector, I think, are old business models, old mentalities over what is profitable in the sector. Essentially, we have old utilities trying to control all the market because they think this is the only way they can make money.

At the same time you have things like, for example, new technologies in the renewable energy sector, busting myths that we used to live with for 10-20 years now. We’ve been growing up with renewables along the side; saying that there is a limit to the renewables you can have (30% in any possible grid). Because that is a limit you can possibly compensate with fossil fuel if your wind stops blowing for example. If there is a sudden reduction of wind energy supply, we were always told you need to have enough gas supply in the system to be able to ramp up your gas turbine and catch up with that. So, there were things like that which really shaped our understanding of what is possible and what could have happened.

Also, because things have been changing so rapidly in this domain I don’t think regulators are managing to catch up. In one year you can have different technologies that a year ago there would not be consider as possible. Energy storage five years ago was seen as an alien thing. Today it is possible. Suddenly that changes market dynamics, the possibilities; it changes the amount of renewables you can compensate for in a system. Price is the other relevant factor. The average person has been totally infestated with the idea that renewables are expensive energy sources. People don’t understand that they’re the cheapest thing we have! Today prices of solar panels are twelve times lower than in 2009. Twelve times down! I don’t think anybody is catching up with this. I don’t thing regulators understand this is actually going on, it’s not expensive anymore, and technical barriers are coming down.

I’m not going to say that they’ll disappear, of course they won’t. But technical barriers are much easier to handle with than they were few years ago. At the same time utilities have to catch up, they have to start realising that that’s not the only business model, if they get stuck with this they will probably manage through collusion with regulators to slow down growth of renewable, but at some point they will bankrupt; at some point if they don’t innovate, if they don’t change how they play the game, they would just not exist, they would be irrelevant.

 

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