Over the last 15 years however, energy has been changing at an increasing pace and sometimes in unexpected directions. Words like transition, decentralisation, digitilisation, democratisation and even revolution are being used to describe what is happening. There is increased uncertainty and a wide range of disruptors.
15 years ago I was modelling the impact of domestic scale generation on UK electricity distribution networks. At that time we thought that it would be Micro CHP that would be straining our distribution networks, in reality it turned out that solar panels would be the domestic generator of choice. This was thanks to a disruptor in the form of an unexpectedly successful government incentive – who would have thought that solar panels would be so popular in rainy Britain!
Incentives from numerous governments and regulators committed to carbon reduction have disrupted energy globally. They have helped to increase volume and reduce the cost of solar panels significantly. I have seen the same disruption happening with wind farms, where technology has improved and prices have dropped significantly. 15 years ago I was part of industry groups discussing the possible grid planning, design and operation issues associated with increased renewable generation. These issues have now been seen in practice and innovative solutions found.
Disruption can also come from local government, motivated by climate change consequences, economic development needs and a desire to reduce fuel poverty. The clean energy developments in New York are just one example of this.
Consumers are also disruptors. In the UK the timing of peak electricity demand is changing, with some parts of the network seeing a peak in the summer instead of the winter due to air conditioning load. In other areas we are seeing higher demand at night instead of day time due to solar panels behind the meter.
Disruption is also coming from other sectors and industries. Globally we are starting to move away from fossil fuelled vehicles and heat and as a result electricity demand is expected to increase. Lithium ion battery development and cost reduction has come from the automotive industry and has made it an increasingly viable energy storage option to help solve some of the electricity grid operation challenges. It may not necessarily be the best technology for all applications but it is becoming hard to displace as prices continue to fall.
New players and new technologies are coming into energy from sectors where changes happen at consumer app development speed, not at utility speed. Virtual power plants/ distributed energy resource management systems, peer to peer trading, demand side response services and even the use of blockchain in energy transactions have moved into reality very rapidly.
All of these disruptors make the future of energy harder to predict, but do make it an exciting industry to work in.
This blog has been written by Katherine Jackson, WSP Technical Director Energy