The early 21st century’s energy revolution: renewables, battery storage and smartgrids

New technology impacts how the world operates and how we do things. With energy required to provide the majority of our modern needs, if you change energy technology then the impact can be more significant than ‘standard technology change’. While you may not notice day to day, we are in the middle of a major energy technology step change. We are in an energy revolution and it is faster and more reaching than others before it. From a centralised model, we are fast moving to a decentralised model with the power resting back with the community or ultimate energy user. Just as in computing, the power is swinging back to the individual. We now have the tools for cheaper carbon free electricity and transport. Technology is allowing things that could ‘never be done’. It is a fast changing energy world and I doubt the winner will be coal.

How has energy evolved? What was it like before the current energy revolution?

To really understand the change in energy technology we need to look at the past. Let us start our story in the industrial revolution around 1800 AD when coal was king.

The use of coal to make a portable steam engine revolutionised the world, in transport and in mass production. People didn’t need to use waterways to move things, they could use a railway for fast and efficient delivery of products and people. You could now put a steam engine in a building and create a high density energy source. The flexibility and uses were wide. Timeframes were cut across the board, productivity soared and time was freed up for more inventions and a greater quality of life (well at least in many countries).

Energy usage changed again as new technology and techniques were used. Energy usage evolved:

• 50 years later into a network of gas street lamps in Sydney and Melbourne
• 50 years after gas lamps, developments moved into electrical power generation and steam turbines (early 1900’s) providing power to local city areas and grids.
• 50 years later as more centralised power plants became common, the small grids were joined up and the Snowy hydro scheme was started as the first major inland (and renewable) power station (1950’s)
• 25 years after centralised power stations were common, the first natural gas pipeline was installed for Sydney and gas and oil was being sourced from Bass Strait and the Snowy hydro scheme was completed (1970’s)
• 25 years (2000) after the Snowy Hydro scheme was completed, energy grids, gas networks and markets were sophisticated and operating as they do today.
• 15 years later we are in an energy revolution categorised by renewables, storage and smartgrids

Energy change with these slow event improvements was measured, creating secure low risk, long timeframe investments allowing large networks to be capitalised with long term yields. Energy was cheap. Government policy could be slow and measured.

Fossil fuels and huge dams were the energy storage options.

Without cheap localised energy storage, electricity grids evolved from the local systems in 1900 to huge transmission and distribution networks. Energy could be shared around the grid as needed. The grid evolved to adapt to generation constraints and optimise around them.

What it is like in the current energy revolution?

It is an uncertain time. The certainty and measured pace of change enjoyed for utilities, generators and end users is not currently available. Possibilities of people leaving the grid and spiralling costs for the remaining end users, forcing more of them off the grid ‘the grid death spiral’ are real (if nothing is done). It will likely be cost effective for individual houses to do this in 5 years time (2020).

It is not just in the electricity sector. We are now in the middle of an energy revolution across most energy sectors if not all. Reliable gas, oil, electricity, coal price forecasts which used to be common, are now hard to get. Whole country energy mixes and needs are rapidly changing. America was one of the world’s largest energy importers and almost overnight in energy terms is ramping up to be an energy exporter. Gas import plants are being reconfigured to export gas before they have even finished construction.

In Australia, energy demand which used to rise steadily with Gross Domestic Product (GDP) is now significantly dropping, a change that caught out energy utilities, investors and regulators.

There is now no expectation of any new large scale energy generation on the eastern side of Australia for many years. While the grid may not have been gold plated, it was built for an energy demand that may not happen for decades. With the whole energy market equation changing in just 6 months, how do you make an investment decision?

Within this picture the renewable energy target (RET), planned to be a stable 25 year policy to transition renewables has been buffeted by political uncertainty. Regular reviews and lobbying resulted in fixing the variable 20% target, splitting components, and then when the grid demand reduced, pressure to unwind the previous fixing request as the fixed target became higher than the original 20%.  Uncertain government policy and government changes have failed to cushion the energy revolution effect and energy has become an important political topic, especially due to fast rising energy prices.

All this and I haven’t even mentioned climate change! Transformative energy changes are happening all at once as part of the 21st energy revolution:

• fossil fuels are becoming risk business propositions (even without carbon pricing)
• renewables now make good business sense
• generation is in the hands of the individual
• local generators have the means of control and storage
• supporting technology is evolving fast
• per-capita consumption is decreasing
• energy storage is becoming cost effective, unlocking mobile device constraints and allowing electric vehicles
• storms and extreme weather events are becoming more common

What is causing this energy revolution and what is the impact of emerging technologies such as renewables and storage on energy delivery?

Leaving out fossil fuel prices, international exchange rates and other country energy needs there are three major technology factors influencing energy in Australia:

• Low cost generator purchase and operation (home energy options, with free sun and wind)
• Affordable energy storage options (home and vehicles)
• Rapid technology collaboration (internet, advanced meters, and other technology tools)

These by coincidence or design have appeared just in time as low carbon, cost effective alternatives to fossil fuels. China’s fossil fuel smog is a reminder that fossil fuels while useful have serious side effects.

Low cost energy generation

The rise of small scale cost effective energy generation (options that are commercially attractive) has been fast. Technology advancements are quickly being made faster and cheaper by countries such as China, with prices halving consistently every year.

Prices of $10/watt for solar PV installed was common in 2005, is now around $1/watt US in 2015 in specific cases. Policy makers in Australia, used to long timeframes didn’t anticipate this change speed. The casualties were government solar feed-in tariff schemes, cancelled overnight or in record time as prices for solar dropped and people jumped to take advantage.

The power (excuse the pun) has moved to the hands of the individual. You can buy your own solar generator for your house. But the sun doesn’t shine at night, and the wind stops blowing. For that you need energy storage. The most effective way is not individuals however but as a community. Therefore technology is bringing us back to a greater community focus.

Affordable energy storage

Energy storage has been the Holy Grail for energy for decades. Large scale dams and hydro power used to be the only affordable energy storage option. Now our smart phones and laptops use high density storage but it has not been cheap. Now with a rush of cheap energy storage technologies, our cars will be able to store their own energy, no fossil fuels needed and we will be able to have affordable storage for our homes, suburbs or grids.

This again moves the power to the hands of the individual. You can now be energy independent if you want to be. Not just for a passionate hippy lifestyle but by 2020 (or likely sooner) main stream off-grid 100% power to the individual will be economically affordable. But will you want to?

Rapid technology collaboration

Technology collaboration is happening fast. Like Information and Communication Technology (ICT) before it, the domain of specialists, centralised computers and difficult interface issues has now become a plug & play, touch screen wonderland for all to access.

Energy is moving this way too. You can turn your lights on and heating before you get home, soon you will be warming or cooling your car, telling your electric car when you want to leave (so it costs as little to recharge as possible) and deciding how much energy you will supply to your neighbours. The smart grid, local grid, microgrid, whatever you want to call it will be the internet of energy. This will allow you a consumer to bank energy, share it and use it on demand.

Companies will compete with phone plan style offerings to provide you with what you want, at a price which you can afford. Energy could finally become hip.

Communities are understanding this, and community owned systems are increasing. Almost 100 communities across Australia are looking at energy independence (over 20 for just one Utility). Community power is growing and with it grows the collaboration. Groups such as South East Region of Renewable Energy Excellence (SERREE) in NSW are forging clusters of knowledge to empower communities and create the change that people want.

Climate change and energy resilience

You can’t talk energy without mentioning climate change. The technology changes are coming just at the right time. The Australian ACT government has demonstrated that for the price of a coffee a day a 90% renewable energy target is possible and is on target to achieve it by 2020. South Australia demonstrated from 9.30am to 6pm on Tuesday 30 September 2014 that 100% renewables energy can power the state.

The energy revolution thankfully will do some of the heavy lifting if we just let it. Coal could be used for other purposes, but as a power source for Australia’s inefficient power stations it seems the market has decided that the time has come.

With climate changes which we are already seeing we will need more resilient energy networks to cope with storms and more extremes.

As an example, if local microgrids had been implemented in Newcastle, NSW recently then houses would not have been without power for a week. A local small scale smartgrid (microgrid) can continue to operate even when supply lines to the region fail.

The United States has a big focus on local grid solutions following Hurricane Sandy in 2012. Defence, NSW government, ACT government, energy utilities and others are looking closely at this area. Solutions that would not have been possible without the energy revolution are now being implemented. Systems that can save millions over conventional energy options, which without the technology changes in the energy revolution would not be possible.

Infrastructure and energy productivity

So where does this leave the utilities, with poles and the wires, the car mechanics and the other myriad of supply chain production technicians, engineers and other trades and professionals that look after the current system?

This is where infrastructure optimisation and productivity will come into the fore. The change in game rules, will mean a new way to use existing assets, price, share and collaborate. This will create winners for those to grab the opportunities, and losers for those that don’t.

You can potentially double suburb populations without paying extra for new electricity supplies into the area, saving millions of dollars. This can be done with smart, clean, green infrastructure, energy efficiency, demand management with greater urban sustainability and more liveable places. Looking at the system as a whole generates huge amounts of benefits. Communities will need to be involved, trends such as ‘transition streets’ are likely to become more common as the community takes a more active role in energy.

Outcomes from the energy revolution

Technology has transformed how energy is delivered. The 21st century energy revolution is occurring at a breathtaking pace. Each person will have much more control, driving when and where they want to use energy and paying accordingly. Energy providers will have to increasingly compete for our dollar.

The smart energy grid will likely becomes a bank with people depositing and withdrawing as they wish, using energy on their portable devices. Central and community energy assets will need to be optimised and diversified or else become stranded. Instead of making it hard for new renewable connections, utilities may be fighting to get them to connect.

The winning companies, communities and countries will be the leaders and adopters, those that can show the way to others. Australia has been a country of leaders and innovation to date, can we keep this mantle or are we slipping behind? Do we back coal or new technology? For us to drive productivity and improve our quality of life we need to embrace the impact of technology as it literally changes the world.

Clean renewable power, storage, smartgrids and electric vehicles will remove smog, climate change and carbon monoxide poisoning risks. These options are now cheaper, more flexible and more personal. Technology has given us a pathway, now we only need to follow it.

~Toby Roxburgh - [email protected]