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New Energy World
New Energy World embraces the whole energy industry as it connects and converges to address the decarbonisation challenge. It covers progress being made across the industry, from the dynamics under way to reduce emissions in oil and gas, through improvements to the efficiency of energy conversion and use, to cutting-edge initiatives in renewable and low carbon technologies.
Over the last few months, the Energy Institute and its Powering Net Zero Board have hosted a series of events featuring panel discussions aimed at engaging a wide audience in the conversation around a net zero electricity system. Melissa Stark, Global Lead for Energy Transition and Net Zero Transition Services at Accenture, looks at the importance of the demand side of the equation.
Throughout the series of dialogues, one conversation built on the other. The first two sessions centred around the question: ‘What is demand willing and able to do?’. How demand works confidently with supply has been a debate for many years now, and the potential is significant.
For example, in National Grid ESO’s 2021 Future Energy Scenarios, the Consumer Transformation Scenario requires ~20% less energy (and therefore less capex infrastructure) compared to the System Transformation Scenario. Business models that unlock consumer actions and assets to support the reliability, flexibility and resilience of the energy system are key elements that would be needed in the Consumer Transformation Scenario.
Honestly, after the two sessions, I was worried. It felt like it was going to be a huge challenge to get demand to participate in the energy transition to the level we need. So many challenges were highlighted by those taking part:
- ‘Basic consumer protections are absent.’
- ‘There is no pathway to net zero that does not travel through the homes of the poor’ – to achieve the decarbonisation of heat also necessitates the eradication of fuel poverty.
- ‘In transport we see uptake because of beautifully designed vehicles, whereas with heat pumps, aesthetics, noise and intrusion are challenges yet to be overcome.’
- ‘Consumers are a hugely diverse group, and the word “demand” falsely indicates a homogenous group that can be aggregated and will react to price signals – we know this is oversimplified and not the case.’
Moreover, there seemed to be much more work needed to deliver the simplicity, market reform and policies that treat demand and supply equally and would incentivise demand flexibility.
The energy crisis
However, this all changed with the Russia-Ukraine war and the global energy crisis. Overnight, diverse consumers everywhere became engaged in the energy conversation. With energy security and cost of living high on consumer and political agendas, this is an opportunity to also serve the goal of driving towards net zero whilst addressing these areas.
If there was ever a time for a World War 2 type energy efficiency behaviour change campaign, it’s now. There was a one-page ‘tips for reducing your energy bill’ article in the Metro (a free London Underground paper) in July. As far as I can recall with 28 years in the industry, people have never been this aware of how much energy they are using.
We can use this crisis to move to a situation where we treat demand equal to supply eg, solar and batteries in homes, better insulation and rationing during peak hours, thereby reducing bills but also improving system reliability and resiliency by making demand more responsive to available generation.
In the third Powering Net Zero session, we moved the conversation to the system transformation and the value of system services. Most people are not aware that we need to change our current grid from a heavy synchronous system made up of a few large dispatchable plants to a lighter asynchronous system with many small, variable, and distributed generation units.
This topic is probably the most difficult for policy makers and the general public to understand because it involves power systems engineering, and we have a lot of decisions to make. Do we try to make wind and solar operate like dispatchable plants with storage and overcapacity, or do we change how we operate the grid to match wind and solar with system services that match that very different inertia profile? In practice, the answer is somewhere in between and, with data and digital, there are a lot of options to address this.
The Russia-Ukraine war and the ensuing energy crisis have also impacted this conversation by reminding us that energy security and resiliency are as important an outcome as flexibility and reliability in the power system transformation.
The fourth and final session of this year’s Powering Net Zero series is on 1 December, at the Energy Institute, where we will have four phenomenal panellists, including Fintan Slye, Executive Director of the Electricity System Operator; Kristen Panerali, Lead for the World Economic Forum’s Clean Power and Electrification Platform; Dhara Vyas, Director of Energy UK; and Randolph Brazier, Director of Innovation and Electricity Systems at the Energy Networks Association. They will bring this year’s discussion together and share their views on how we get to an integrated energy system with an electricity backbone.
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The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.