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Energy: the future is renewable and distributed

Chris Wright

24th August 2015

With centralised fossil-fuel and nuclear generation both undesirable and increasingly unviable, the answer is to make our energy local, distributed and renewable, writes Chris Wright. But to complete the picture we need battery systems for backup, stability and efficiency. And one could be coming your way soon ...

Distributed energy-storage systems will enable a new paradigm for how energy can be generated, distributed and used - one which takes control away from the big energy companies and gives it to us.

Despite the best efforts of some governments, distributed renewable power generation, such as rooftop solar and wind, is getting ever cheaper.

Across the US, UK, Germany, Italy and other European countries, as well as a host of tropical and subtropical nations, they are representing an ever-larger share of the electricity generated.

For those of us interested in a future in which we are not dependent on fossil fuels this is great news. It does, however, present some serious challenges.

The first concerns the delicate high-wire act that plays out across the grid every day. The electricity that we use across the UK must be exactly matched at all times with the electricity being generated.

The systems and business models that have traditionally managed this balancing act proved very reliable for the last 60 years. They depend on managing fossil-fuelled power plants to produce the right amount, second by second.

Fossil fuels on standby

As the proportion of our energy that comes from renewables rises, however, it presents challenges to this system. Wind and solar power are not predictable and controllable in the same way. It need hardly be pointed out to the British reader that the sun does not shine. But even here, the wind does not always blow, either.

There are two major ways in which this problem can be solved. The first (and this is largely how things are done at the moment) is to have a significant proportion of fossil-fuel generators on standby to provide power if it is needed. This is hugely expensive, both in terms of the capital that could be used to invest in more renewable generation, and the environment, as the power plants use energy to act as a 'spinning reserve'.

In the UK and elsewhere, this system is already showing serious signs of strain and under-investment. One telling example is in the workings of the wholesale energy market. On several occasions already this year the amount of solar energy being generated has forced energy prices negative, with the extraordinary result that you could be paid to consume power.

The second, more intriguing solution is energy storage. That could include all sorts of things, for example pumped storage hydro power. But especially intersting just now are batteries, an area of rapid technological development - and grid-linked battery systems in particular.

Smoothing out the peaks and troughs

The installation of large quantities of flexible electricity storage 'nodes' on to the existing grid enables the peaks and troughs of both power generation and consumption to be smoothed out.

Excess wind energy generated in the middle of the night can be absorbed when it's not needed, and released in the evening at peak periods. Similarly, solar energy can be stored from the middle of the day for later use.

The most promising development in storage for households and businesses is the advent of 'behind-the-meter' systems, installed alongside solar, supplied as a package complete with inverters and control gear. Prices are coming down fast, following a similar cost curve to that of solar, which has seen a reduction in prices by 80% since 2008.

Moixa's 'Maslow' 2kWh system is available now for £2,000, and a complete system built around Tesla's 10kWh 'PowerWall' is due to sell in the US for $7,140 through preferred supplier SolarCity, or $5,000 for a nine-year lease - when it's finally available. Customers are hoping for installations to begin before the end of the year.

Both have the potential to more than double the proportion of your own solar energy that you can use yourself.

The social grid

If storage is installed at the same time as renewable generation it has the potential to enable a smooth transition to a low-carbon economy, and also to refute the arguments of those who claim that nuclear is the only solution to 'baseload' power.

There is, however, a dark side to this scenario. With cheap energy generation from solar panels, storage to provide power when the sun is not shining, and rising grid energy prices, many consumers face a growing temptation to disconnect from the grid entirely - perhaps with a diesel generator as backup.

However this option is restricted to those who can afford the capital costs. There's a risk that the poorest in society are left with no option but to buy their energy from a grid that becomes ever more expensive, as fewer people share its costs, and less and less reliable, as the economics of centralized fossil fuel generation break down.

There are indications in both Germany and the UK that this is already beginning to happen. In Germany, one businesses in six generates its own power, and a further 23% are considering doing so, driven by energy prices that are twice those of the UK.

This has not escaped the notice of the industry there, with both EON and RWE divesting their generation businesses into 'bad bank' type companies, declaring that they are interested in renewables and energy services going forward.

In the UK, we see that the industry is failing to invest in new generation, making the grid increasingly insecure. Every year, Ofgem predicts the risk of blackouts, which is on the rise. In the 2013 report it is predicted as one in 12. For 2015/16 risks are assessed to have risen further still.

Community energy enabled by smart systems

There is an alternative. Smart internet-enabled storage systems, distributed across the grid, are working to enable it to cope with the challenges of renewable generation, becoming more efficient and cost-effective in the process. Moixa is testing some of these solutions in two projects.

One, under a contract from DECC (the Department of Energy and Climate Change), is testing how 250 Maslow systems installed across the south of England can be linked across the internet to provide energy services, pulling and pushing energy on demand as if they were a single system.

The other, project ERIC, is installing 100 systems across a local community in Oxford with the aim of demonstrating how these connected systems can manage energy flows in that community to maximize the local use of local generation. 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 enable those who can afford it to disconnect themselves.

Tesla's Elon Musk is also clearly aware 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."

This technology has the potential to transform the energy industry at the same pace other industries have been disrupted by the internet. And the opportunity is here to make this a positive social development, rather than another technology that enables the rich to isolate themselves from society.

The future of energy is local. Distributed energy-storage systems like Tesla's Powerwall or Moixa's Maslow will enable a new paradigm for how energy can be generated, distributed and used - 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 the energy.

Power to the people, indeed!



Chris Wright is the Chief Technology Officer of Moixa Technology.


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