Cambridge Business Association
Why Your Company Needs to Be an Electricity Trader
Article

Why Your Company Needs to Be an Electricity Trader

Philip Hirschhorn and Tom Brijs
Boston Consulting Group, 2021
Read the article

Read or listen offline

Amazon Kindle
  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×

Editorial Rating

9

Qualities

  • Innovative
  • Visionary
  • Hot Topic

Recommendation

Today, about 29% of electricity is generated through renewable sources, but by 2050, renewables should account for 90% of global production. What will that mean for a power grid that was created with fossil fuels in mind? If you guessed that introducing the variability of renewable power will challenge the system, you guessed right. In this special report, the Boston Consulting Group is calling for companies to shift their focus and change their identities from energy consumers to “asset-backed green-electricity traders.”

Summary

As the world switches to renewable energy, the price of electricity will grow more volatile.

Nobody knows exactly what the future of energy will bring, but as underlying energy infrastructure becomes more complex with renewable infiltration, issues may arise in terms of reliability, stability and price volatility. Areas with a high degree of renewable power generation already struggle with resource and network adequacy as well as voltage and frequency stability. Renewable energy will be cheaper during certain seasons and times of day (for example, when it’s sunny or windy), but energy prices will be more volatile overall. 

A popular refrain among renewable energy advocates is, “Electricity will be free!” Perhaps this statement would be more accurate if they added, “except when you really need it.” California has already experienced this phenomenon. During the sunny middle part of the day, electricity prices...

About the Authors

Philip Hirschhorn is a managing director and senior partner in the Boston Consulting Group’s Sydney office, and Tom Brijs is a principal in the Brussels office.

Comment on this summary

  • Avatar
    Sign in to share your opinion
  • Avatar
    M. H. 2 years ago
    Great short primer and the importance of Demand Response programs and a proactive energy procurement strategy