An Energy Tipping Point

I have been thinking about the long term themes that are driving the UK electricity industry and started by looking back over the last thirty years and then considering what things might look like in thirty years time. I have identified six themes.

1. BIG TO SMALL.

Thirty years ago and indeed until a few years ago our electricity was produced by around 100 large plants, each one of which consisted of a few units of 400MW+. Now there are over half a million small electricity producers ranging from community wind turbines to roof top wind turbines along side a decreasing number of older, large ones. This trend will, I believe, inevitably continue as the developer of any new house, office or factory will be looking to include on site generation. In 30 years time we will have millions of mini power stations.

2. CENTRALLISED TO DISTRIBUTED.

One consequence of the industrial scale of our power plants is that the electricity system became incredibly centralised. A classic example was the concentration of power stations along the so called megawatt valley in Yorkshire. As a result control of scheduling and dispatch was concentrated in initial three, and now one, control room full of smart engineers. This will change as the whole electricity network shifts from an analogue mode to a digital one. The network of 30 years time will be multidirectional, self healing and fully distributed. The smart engineers will be replaced by a smart network. 

3. CARBON TO SILICON.

The industrial era electricity was successfully built on carbon, initially coal and latterly gas. This was largely completed before we realised the long term consequences of CO2 emissions and the link to climate change. The energy industry has been one of the major beneficiaries of the lack of a price of carbon. But this is changing. In the UK we are very very unlikely to see any new coal fired power stations built unless they have carbon capture technology fitted and the pace of new gas stations has slowed to a trickle. Renewables have filled the gap supplying 25.3% of our electricity in the second quarter of this year. The biggest shift in the very recent last has been the rise in solar where capicity is already over 8GW (that's twice the capacity of our largest coal station, Drax). The trend in solar panel prices and advances in technologies like this film solar suggest we are heading into the silicon age. 

4. SUPPLY TO DEMAND 

Energy policy, investment and technology has been focussed on the supply side of the industry. What shall we build, how and where? However, all the disruptive change is now happening on the demand side with home automation, energy management systems and active demand all figuring highly in the new business start up arena. More and more customers, be they large property owning landlords or owner occupiers, are now getting engaged with their energy demands. The new questions will be what  energy do I need, how will I manage it and where should I get it from. When customers take charge of an industry, Revolution happens. 

5. PRODUCTION TO STORAGE

The twentieth century electricity system used flexible production to manage the peaks and troughs of demand. This has lead to demand for services like spinning reserve and stand by generation. These use energy to be ready to supply energy which has always seem a bit odd. This production centric view also leads to the bizarre situation of effectively free marginal cost energy being wasted (wind farms and solar panels being left idle when demand is low). Now one of the biggest areas of energy research is in storage including batteries, phase change materials and physical storage systems. Storage can be at the home level, at the neighbourhood level or connected to the grid. 

6. PETROL TO ELECTRIC 

The internal combustion engine has revolutionised personal transport and petrol and diesel have dominated vehicle fuel. However, we are seeing more and more car manufacturers are releasing all electric and hybrid cars. They are clean, quiet and fast and the range is steadily increasing, especially in the hybrid mode. I now drive a BMW i3 around town and suspect that more and more city cars will be electric.

I believe that, right now, we are at the tipping point in all these themes and realised that a picture could paint a thousand words.

Why do I think it's a tipping point. Mainly because all of theses themes have becoming increasingly clear over the last few years and the changes in digital technology and  awareness of climate change are respectively an enabler and a driver of change. After ten years or so of fits and starts all these themes seem to be gathering pace and are chipping away at the forces of inertia that the old forces have built up. Exact tipping points can only been seen clearly in the rear view mirror but it does feel that, taking the long term view, the future will be a lot different than the past.