Renewable energy is transforming the way electricity is generated and consumed; With more control being handed from public utilities to consumers, the grid simply cannot continue to operate in the same way
For close to a century, the structure of the electrical grid remained largely unchanged: electrons were generated at a large power station fuelled by coal or gas before being sent down high-voltage transmission lines and distributed throughout homes and businesses across a given country.
This system was originally conceived to support fossil fuel power plants, which benefitted from the economies of scale it presented. In other words, building one large power station was more efficient and cost effective than constructing several smaller ones across the country.
Over the decades, however, consumers have become disengaged with the energy market: having lived miles away from any source of electricity generation for so long, it became easy to take instant access to power for granted.
Today, a quiet revolution is occurring in the dark corners of the grid. Advances in technology are reducing carbon emissions while empowering consumers to take more control of their energy usage. This is causing a seismic change in the role of public utilities, as well as the way electricity is produced, transmitted and consumed.
Until a few years ago, the centralised system worked for most forms of energy generation. But the adoption of new technologies – particularly solar photovoltaic panels and wind turbines – has started to drive change throughout the market.
The cost of generating electricity from renewables has dropped dramatically over the past decade, especially in the last five years. Investors who were initially wary of green projects are now beginning to embrace them – no doubt helped by the raft of government subsidies prompted by global decarbonisation goals.
In fact, according to REN21’s Renewables 2018 Global Status report, renewables accounted for around 70 percent of net additions to global power capacity in 2017 – due, in large, to the cost competitiveness of solar and wind power.
These distributed energy resources are fundamentally different from historically centralised power stations. Renewables like solar panels, wind turbines and small-scale hydropower systems lend themselves to a decentralised grid because of their flexibility and modularity – energy from wind, sunshine and water can be captured nearly anywhere.
Despite these changes, the grid will still be an integral framework moving forward. “It’s very clear to us that not only do we need the grid, but we have to think about what a grid is,” Louis Shaffer, Distributed Energy Segment Manager for Europe, the Middle East and Africa at power management company Eaton, told The New Economy.
“It’s the ability to transfer electrons, and that is one of the great things about electricity: you can move an electron from somewhere in Scotland to somewhere in France almost instantaneously.”
The grid network – as well as these interconnections between countries – will be an essential component in managing the coming change, but a centralised model is simply not sustainable moving forward.
Further developments in renewable technology will inevitably redistribute power in the energy market, giving ordinary consumers more control over their electricity usage. At present, there is almost no barrier to building a power generator in your own home – for a small cost, anyone can install solar panels on their roof.
Consumers are showing a strong appetite for this control, too. Although ‘prosumers’ – consumers who also produce their own energy – are still a minority in the market, Pietro di Maria, Chief Commercial Officer at Green Network Energy UK, believes smart meter technology is engendering real change in this area, allowing utilities providers to differentiate costs over the period of a day based on fluctuations in supply and demand. In fact, at the current rate of development, advanced smart meters will soon be able to monitor a home’s energy usage on a half-hourly basis.
“If we introduce this kind of structure… [it] is going to be a revolution because we are going to match the consumption with the production,” di Maria said. There are still a few obstacles in the way, including the slow roll-out of smart meter technology and a regulatory framework that is not ready for revolutionary changes any time soon. In five years or so, however, di Maria envisions a big future for the smart home.
Electric vehicles give prosumers another element of control over their energy input and output. Unfortunately, they will also have huge implications for the grid. Bloomberg New Energy Finance (Bloomberg NEF) has predicted half of all new cars sold by 2040 will be electric vehicles; plugging just one into the grid, however, is said to be the equivalent of adding three houses in some instances.
While overcoming this challenge is not impossible, the infrastructure must still be built and the storage of electricity must be paid for. According to Shaffer, this is something grid managers will “have to get [their] heads around”. It is also crucial for electric vehicles to be charged in a smart way, meaning cars charge when capacity is available on the grid rather than exacerbating an already stressed system.
A smart charging system, therefore, would account for renewables, which generate energy at variable outputs. “You don’t want the electric vehicles to be charging when there isn’t any wind and there isn’t any sun,” said Felix Chow-Kambitsch, Head of Flexible Energy and Battery Storage at Aurora Energy Research. “You’ll want to synchronise the charging with the renewables output.”
This system will take household demand into consideration by charging cars overnight, when demand is low, rather than in the evening, when a large number of people are returning home from work.
While these are seemingly small adjustments, they could have a massive impact on the grid’s capacity to deal with millions of new points of demand. The UK’s National Grid has said accommodating nine million electric cars could require 8GW of additional power generation capacity. By changing to a smart charging system, however, that output could be halved to 4GW.
These benefits could be amplified further through vehicle-to-grid (V2G) charging, a method of two-way charging in which battery-powered vehicles export electricity back to the grid while the car is parked and plugged in. However, most researchers tend to think the impact of V2G would be marginal.
In fact, in 2011, the Massachusetts Institute of Technology stated that modifying conventional, unidirectional car chargers would be “substantial and expensive”, adding that the economic incentives appeared to be weak.
Ultimately, if V2G charging is commercialised, it will be up to consumers to decide whether or not they make the leap. Shaffer believes the decision is similar to installing residential solar panels: “If the payback makes sense to you versus the wear on your battery, some people will choose to do it, and some people will say, ‘I don’t care, I just want my car to be able to go from A to B’.”
The key word for the grid of the future is ‘flexibility’. With electricity generation coming from a raft of new sources, grid managers will need to learn how to cope with variable production as the distance between peaks and troughs of supply grows.
To answer these questions, industry experts are looking to further advances in technology. Electricity storage has been around in one form or another since the early 20th century. The ancestor to modern technologies, pump hydroelectric storage, works by stockpiling energy in the form of water in the higher of two reservoirs. The energy can then be freed by releasing the water through turbines to the lower reservoir.
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