The way energy is generated globally is changing fast. Renewables represent an ever larger share of the electricity generated. The turning point came in 2013 which was the year that renewables took the lead in terms of new capacity compared with fossil fuels. And renewables are on course to make up more than two thirds of new capacity in the next five years.
Good news, surely? The short answer is yes, if we want a future in which we are not dependent on fossil fuels. The long answer, as ever, won’t be quite so clear-cut as some serious challenges lie ahead.
Firstly, there’s the delicate matter of balancing out supply and demand when it comes to the UK grid: our energy use must be exactly matched with the electricity we generate. For the last 60 years, we’ve relied on tried and tested business models that manage traditional fossil fuel power plants and precisely generate the electricity needed at a given time.
But renewables, and our increasing use of them, are shaking the protocol. Wind and sun are inherently unreliable and uncontrollable. Without adequate investment, the system is under strain.
In the UK the wholesale energy market is what regulates the system. And this mechanism gives an early warning of the pressure the system is under - during the last year there have been several incidences of negative energy prices where the market would pay you to use power.
As the late David MacKay has pointed out, the accelerating uptake of electric vehicles (EVs) is going to make things worse, and more frequent. To give an idea of the scale we’re talking about, a domestic car charger uses eight times the power of the average home at peak. The result: further strain on the grid.
There are two ways to deal with this potential crisis situation. The way we manage at present is largely with the standby model. A significant proportion of fossil fuel generators are kept on standby. If needed, they can be called upon at very short notice to boost power to the grid. But this system comes at a heavy cost, firstly to the environment from keeping the power plants on standby and secondly to renewables, as much-needed capital is ploughed instead into yesterday’s fossil fuel technology.
The second way is the increasingly hot topic of energy storage. It’s a broad church, comprising everything from pumped-storage hydroelectricity to batteries. It’s the latter that is—pardon the pun—generating a real buzz right now. The humble battery is a technology that’s developing rapidly, especially grid-linked battery systems.
The goal is to smooth out the peaks (during periods of high demand) and troughs (which tend to be in the middle of the night) by installing flexible electricity storage ‘nodes’ on to the grid. Thus, renewables effectively become more predictable. When it’s windy in the middle of the night, the power generated can be absorbed and stored, and released back at peak periods in the evening. Solar energy generated during the middle of the day can similarly be made available for use later on.
The most exciting development in storage for households and businesses are 'behind-the-meter' systems. These are installed along with solar systems in an all-in package complete with inverters and controllers, or retro-fitted to existing solar systems. They are becoming economically compelling, and are following solar PV - which has dropped in price by 80 per cent since 2008 - on the cost axis.
Moixa's 'Maslow' 2kWh system is available now for £2,100. In the US, Tesla’s 7kWh ‘PowerWall’ is slated to sell for $7,140 through preferred supplier SolarCity, or prepay $5,000 for a nine-year lease. Since at present much of the solar generated at home is exported, these systems represent a cheering prospect: they can both potentially double the solar energy you can actually use yourself.
The social grid
It makes sense to install storage at the same time as renewables. This is what offers the potential for a smooth transition to a low-carbon economy. Nuclear, it would seem, is not the only low carbon solution to ‘baseload’ power.
But let’s look at this from a different angle. What happens if customers, awash with new cheap energy generated and stored at home, and against a backdrop of high and rising grid energy prices, decide to go it alone and disconnect from the grid entirely? Maybe with a diesel generator as backup?
If you can stump up the upfront cost, this might seem tempting. But what if you can’t? The poorest in society are then, in this scenario, sitting ducks, having no option but to buy their energy from an increasingly expensive grid as fewer people share its cost burden. The economics of centralised fossil fuel generation then break down and the knock on effect is to make the grid less reliable.
This is already starting to happen in Germany where energy is twice as expensive as in the UK. There, one business in six generates its own power and 23 per cent more are considering it. In the UK, Ofgem’s annual blackout risk prediction shows arise from one-in-12 risk of blackouts in its 2013 report to a projected one-in-four for 2015/16.
Smart energy is local energy
So what’s the solution? The answer is smart internet-enabled storage systems, distributed across the grid. As these work to handle the challenges of renewable generation, they are simultaneously becoming more efficient and cost-effective. Moixa has three projects under way to test some of these solutions.
The first, under a contract from the Department of Energy and Climate Change (DECC), is testing 250 Maslow systems installed across the south of England and how they can be networked to provide energy, pulling and pushing power on demand as if they were a single large installation.
The second, project ERIC, is installing 100 systems to demonstrate the value of controlling energy flows in a local community in Oxford. Both of these challenge the business models of the energy industry but aim to reinforce the value of the grid infrastructure in the future, rather than incentivising people to go off-grid.
The third project tackles the issue of electric vehicles. Moixa is working with partners to show how the vehicles can function similarly to home storage. With smart systems they can move from being the problem to being part of the solution. Power, which can service either local or national needs, can be pushed and pulled from the EV battery when it is parked - as the average car is for 95 per cent of the time according to Nissan. It’s Moixa’s GridShare software platform that powers the intelligence to make this effective and flexible. Such Vehicle-to-Grid potential is also being explored by Enel in Europe and Nissan in Japan, and Tesla's Elon Musk has shown awareness of the potential social impact, having been quoted as saying: "I don't think we should disrupt things unless it's ... fundamentally better for society."
Such advances are potentially transformative, not just in technological terms, but in social terms, too. We don’t want a society in which the rich can isolate and insulate themselves further from the underlying structures that ultimately help our society to function.
So the future of energy is local and smart. Distributed energy storage systems are ushering in a new paradigm for energy generation, distribution and usage - one which takes control away from the big six fossil-fuel energy companies and gives it to the homes and businesses who use and generate it.
It’s power to the people – and indeed, we could be talking about a revolution.
Moixa is a UK finalist in the 2016 Ashden Awards which reward pioneering sustainable energy enterprises and programmes from the UK and across the globe. This year’s winners will be announced at the annual Awards Ceremony in London on 9 June 2016. Chris Wright is the Co-Founder and CTO of Moixa Technology.
Ashden is a Futures Centre partner.
Top image credit: Neil Tackaberry