In an era of emerging transformational technologies that promise to have disruptive economic and strategic impacts—from 3D printing and robotics to biotech—renewable energy is rarely at the top of futurist lists. But maybe it should be. Continuing long-term trends point to a steady decline in prices and parallel increases in efficiency by 2035. Technology, policy, and finance are the three traditional underpinnings of the energy sector. Policy and capital markets are generally not very agile in responding to the evolution of technology, and technology tends not to be very agile in the byzantine world of policy. While each leg of the stool is important, technology and finance have become the principal drivers.
The electricity industry, including the electric grid, is facing a considerable transformation—one that will only increase in magnitude and importance in the future. This transformation creates new challenges, but with those challenges come tremendous opportunities for better shaping the electric grid into a more reliable, resilient, and affordable grid that can continue to serve as the foundation for the economy and the enabling platform for meeting society’s needs.
It is fair to say that the last few years have ushered in an era of dynamic change in the electricity sector the likes of which we have not seen in decades. Technologists, software companies, financing providers, and information technology companies seeking to redefine the very nature of energy services and to challenge the century-old-model of a one-way grid enabling centralized generation and distribution of electrons to customer meters whose primary function is to record and report consumption. Distributed generation, data analytics, and connected, smart devices being offered to customers not just to optimize consumption, but to position customers as full participants on a grid or distribution system where both electrons and information can flow freely in two directions. The promise is for customers to make choices and for the grid to have new options to meet the balance of supply and demand while lowering carbon intensity and reducing the need for new, centralized generation.
The cutting edge of disruption in the electricity sector today is the growth of distributed generation and storage. Central to this potential revolution is the reimagining of the ‘customer’. Electricity policy and market innovations in the past were made with only a static view of the customer – the idea that all relevant changes to the system would occur up to the point where the electrons hit the customer’s meter.
The electric system of the future will include both central and distributed generation sources with a mix of dispatchable (i.e., controllable) and non-dispatchable resources. Energy storage will be a key component in future system design, but it will not replace the need for dispatchable generation. The grid will be a key component of the future electric system; it will be the network that serves as the backbone of our electric power system.
Many factors will impact the pace and scope of the expansion of solar, wind , tidal etc. energy use. These include federal and state tax credits, feed-in tariffs, growing pressures of climate change, and a projected low-price environment for natural gas. But looking over the coming two decades to 2035, the key obstacle and/ or enabler will be the degree to which the grid system is modernized and digitized into a smart grid; in the longer term, advancement will hinge on breakthroughs in cost-competitive energy storage. Perhaps the ‘X factor’ determining the degree to which renewable energy accelerates and becomes disruptive is the development of more efficient and cost-competitive energy storage. Battery storage may be approaching a tipping point. Researchers working at the molecular level have made small improvements, experimenting with different materials, but the difficult physics and electro-chemistry have made progress slow and incremental over more than two decades. There are other types of energy storage in various stages of development. These range from flow batteries to salt water batteries to ultracapacitators using new energy-conducting materials such as graphene.
To effectively integrate burgeoning intermittent energy sources like solar and wind into the grid, smart grids are key; and over time, the limits of such integration will likely be determined by cost-competitive energy storage. The grid will be the enabling platform— much like the body’s central nervous system—for a very dynamic and complex system with many interdependencies. Increasingly complex, it will be more flexible, adaptable, and responsive. Interdependencies and interactions between transmission and distribution system operations will grow. A high-bandwidth, low-latency, cost-effective communication system will be needed to overlay the entire grid. Real-time, automated communications to end-use devices and equipment. Distributed grid intelligence will expand. Microgrids will play a role in the future grid and will either operate in parallel or in island mode as needed. Advanced analytics that leverage exponential growth in data will play a critical role. Safeguards will mitigate and protect against cyber, physical, and other threats. The grid’s increasing complexity will require numerous technological and business process changes:
- Self-learning systems
- Larger transmission-level balancing areas or increased coordination between transmission level balancing areas, as well as more granular balancing capabilities at the distribution level
- Balancing capabilities utilizing both supply-side and load-side options
- Security and privacy implemented in all aspects of the system, down to end-use devices.
- Plug-and-play capabilities.
Smart Grids and Microgrids that use technology to economize consumption are starting to change the way many people think about energy, while also providing for a more symbiotic relationship with centralized national grids, which may have a tougher time competing with the now flourishing decentralized energy production sector. Microgrids are also creating a whole new market for energy where people can buy directly from their neighbors, and at a discount. Cogeneration is another potential byproduct of a microgrid. Cogeneration is a way to get more out of the fuel by simultaneously producing energy and heating for buildings.
With smart grids, microgrids, and nanogrids on the rise, perhaps the future of the national grid will be distributed, which raises many questions, like how to maintain hundreds of miles of lines between the many grids. Could an energy grid be managed as a commons or as a cooperative?