FRANKFURT |
Thu Jul 29, 2010 8:20am EDT

FRANKFURT (Reuters) – The planned expansion of renewable energy in Europe will lead to a gradual displacement of centralized conventional power plants, presenting challenges for leading generators, a study released on Thursday said.

Already by 2020, the share of decentralized electricity-generating capacity as part of total installations could rise to 40 percent from currently 15 percent, said the study from the German section of Boston Consulting Group (BCG).Due to their climate merits, big nuclear units may retain a role in complementing “green” capacity, which generates power from wind and photovoltaic energy and in small heat and power blocks, but the role of gas and coal as fuels would diminish.This would put pressure on utilities’ established model of big generation units, which use gas and coal as feed.“What is clear is that business as usual is no longer an option,” said Michael Kofluk, partner and managing director of the BCG Stuttgart office and head of the German energy practice.The drivers of the coming changes are European Commission goals to adopt low-carbon power systems, to protect the climate and to emphasize local energy sources to cut import dependency.There are also aims to produce more power locally, so consumers will no longer be passive recipients of distributed power, but produce energy themselves. Distribution networks will incorporate everything from rooftop wind turbines and solar panels to micro-heat-and-power blocks in homeowners’ basements.Especially the subsidized solar power industry is expected to grow rapidly. BCG said currently installed solar module capacity of 10 gigawatts (GW) could rise to 90 GW by 2020.By comparison, Europe’s total power capacity is 800,000 MW.BCG said there were big opportunities for energy and IT operators to create and run more intelligent networks to absorb the flexible production, novel energy storage systems, and software systems to handle the new technologies.“A new computer-based energy infrastructure is needed,” said BCG, naming technology firms such as IBM and SAP as possible entrants to an industry currently dominated by the likes of E.ON and RWE.(Reporting by Vera Eckert)