By Paul Ebert, Global Director, Energy, at Advisian
While the advance of solar PV in Australia has been rapid – in the last five or so years rooftop PV systems have become mainstream – a big issue remains: PV cannot generate electricity at night or as well during cloudy periods. Users still rely on an alternative power source when it is dark and most will default to the familiar grid supply.
Someone has to pay for that grid, and in Australia, energy users pay a relatively fixed network component in their per-unit tariff. Those with PV still pay the same cost per unit but use less grid-supplied electricity sourced from coal-fired or gas-fired generators.
As there is less money flowing to the grid, the fixed charges must eventually increase. Then begins what many commentators have called the “death spiral” – put simply, as more people install PV those without the capacity to invest in such pay higher fixed charges, and so on.
Is this the end of the grid?
We don’t think so: in fact, we think the grid will actually be a key element in a new energy future, perhaps even flourish like never before, even with continued uptake of PV. But it will be used differently, and perhaps more effectively. The evolution of smart grids has reached a point where load can be controlled to accommodate the constraints of traditional generation plants and transmission grids. This allows for a more flexible relationship between generation, grid and load, improving efficiency in terms of cost and asset use.
However, further unlocking the potential of smart grids will require greater interaction with customers via the “energy internet”” – the vast network of devices that generate, store, and consume energy.
The driver of extracting the energy internet’s value for consumers is all about data.
In the new energy future, suppliers will need the technologies to acquire the right data, to analyse it, to make decisions for particular circumstances, and to profit from the trade that results. This data could also be used to optimise the interaction between the technologies behind solar, energy storage and the electric vehicle.
You only need to look at mobile phones as an example of the commercial value there is in data. Designed initially for voice communications, mobile phones have evolved to become, for many, a main conduit for a wide range of daily transactions. Mobile devices, being able to produce, analyse and control data through a plethora of enabling applications, have given rise to and promoted the spread of new business models. The commercial ecosystem around these devices continues to evolve, unlocking remarkable innovation as well as both social and economic transformation.
Through networked devices and appliances, businesses are already collecting data that lets them examine customers’ energy use and – from this data – tailor solutions to meet specific customer needs. One example is a new generation of refrigerators, which can now be remotely switched on or off, as and when required by the utility. This can be used to reduce energy use at peak periods for which the customer can be compensated. Another example is the trial of privately-owned BMW electric vehicles to provide demand-response services for transmission-system management, where the owners’ charging (or demand) is controlled – depending on what the grid needs.
The key takeout from this is that businesses, including energy businesses ranging from generators to retailers, can now achieve much finer alignment with their customers’ individual demands, while at the same time optimising their aggregate response in a way that benefits these businesses. This possibility applies not just to the electricity industry, but also to gas, telecommunications, and even water supply and wastewater removal industries.
Ultimately, the energy internet will become a platform that optimises energy solutions while also managing supply and demand in aggregate, in a way that crosses business boundaries. A whole range of new tradable commodities could emerge, most of which we have not even begun to imagine.
ABOUT THE AUTHOR
Paul Ebert, Global Director, Energy, at Advisian, has always worked at the change end of the energy spectrum, in a career of more than 20 years – concentrating on technological and business disruption.
He has expertise particularly in clean energy systems, including renewables and hybrids with various fossil technologies, but also their innovative uses in networks, including fringe of grid and micro systems, as well as the enablers for such systems including energy storage and control technologies.
Paul currently leads Advisian’s Global New Energy team, which is helping clients transition the energy solutions of the past to those of the future in work that covers asset investment, strategy development, technology selection, policy and business model evolution.
As well as his role at Advisian, Paul holds a number of advisory and board positions in the renewables and related research sector.
ABOUT ADVISIAN
Advisian is a global advisory firm that provides project and business solutions to clients who develop, operate and maintain assets in the resource, energy and infrastructure sectors. With 3,000 consultants in 19 countries, Advisian has significant experience supporting clients throughout the world to develop and deliver projects, by providing technical and advisory expertise.