We are at the start of an energy transformation, and it involves much more than moving from oil, gas, and coal to solar, wind, and hydro. We’ve experienced several fundamental transformations in the last century:
- Shipping and logistics moving to containerized cargo
- Office work moving from paper to computers
- Telecom moving from landlines to digital Internet Protocols.
With transformations, it is easy to foresee the initial stages. It’s harder to predict what will happen later because that is built on components that aren’t initially in place.
The first stage of any transformation is motivated by moving to a technology that makes things dramatically cheaper, opening availability to new users and uses. It is driven by innovation and enabled, eventually, by regulatory changes that unlock industry shifts. This takes considerable pressure since entrenched interests involved in the older technology and protected by regulations will do everything possible to resist change.
The energy transformation is similar to the telecom transformation that began fifty years ago and ultimately resulted in the Internet and everything associated, from online shopping to mobile phones and enterprise cloud computing. The telecom transformation was originally motivated by pent-up demand for less expensive long-distance calling and enabled by the development of Voice over IP technology.
To get less expensive long-distance calling, we changed long-standing regulations that governed every aspect of telecom and mandated that local phone calls be subsidized with high long-distance fees. With changed regulations and Voice over IP technology in place, it became just as easy and inexpensive to connect to someone halfway across the country as someone in town.
Once we shifted from analog switched circuits to digital data circuits using internet protocols, the original raison d’ê·tre for telecom–voice calling–became just one application on the digital data network. Arguably not the most important one, at that.
In the telecom transformation, we didn’t set out to create a system that allowed us to buy books from a website or have a video conference with our doctors. But we created a platform that enabled countless new applications we could barely dream of when we were trying to decide if we could afford to call our relatives in another state or – heaven forbid – another country.
The main technology characteristics of the telecom transformation included a shift from analog to digital, from centralized to decentralized, and from dedicated services to the separation of applications and underlying data connectivity.
The energy transformation is strikingly similar. It is motivated by pent-up demand for cheap, abundant energy and the need to decarbonize. We are creating an energy platform that will lead to new ways of doing things we can barely imagine today.
Energy production is transitioning from centralized to distributed, with a multiplicity of solar and wind installations of various sizes and locations. Power generation itself is shifting from analog to digital: moving from a system that gets stability and momentum from large spinning turbines to one utilizing inverters, batteries, and dispatchable hydro. Energy consumers, applications that use power, are becoming more flexible and dynamic, allowing for better optimization in the transformed energy platform.
Let’s look at the home – it has a new role in the transformed energy platform. Like a server on the Internet, the home is a smart node that creates, consumes, and manages power and contributes important data to the grid. We will produce power locally from rooftop solar. We will store power in batteries in our car or garage. We will get smarter about how we take power when it’s abundant and give power when it’s scarce. The regulatory changes required to support and encourage greater integration of the home with the broader energy platform are starting to be put in place. Most power utilities and regional regulatory agencies have implemented programs of Net Metering (NEM), Time-Of-Use Pricing (TOU), Demand Response (DR), and Vehicle-to-Grid (V2G).
The Transformed Energy Platform will be further distributed and decentralized with Community Choice Aggregation (CCAs) and microgrids. Collections of homes become dynamic elements of the energy platform. Aggregating rooftop solar, utilizing shared storage, and controlling demand for applications like washing clothes, air conditioning, and EV charging, to maximize the available energy of the microgrid. Only off-taking energy from the main grid when energy is abundant and cheap or when absolutely needed.
Innovative companies have released products that work with utility rate schedules and programs to optimize energy usage and save money for homeowners. Leap.energy has partnered with Lumin to deliver home control that takes advantage of the financial incentives of Demand Response programs. Companies with similar products include Span.io, Sense, Dcbel, and Ecobee. Google and Amazon have divisions focused on developing products for home automation.
Some utilities are implementing programs to tap the energy stored in car EV batteries for the grid during peak demand. The New Hampshire Energy Coop has introduced a Vehicle-to-Grid program that pays EV owners for energy during peak consumption time.
Even greater resilience and efficiency are achieved where microgrids serve clusters of homes aggregating rooftop solar and managing energy consumption. In our transformed energy system, the grid begins to look like a network of interconnected microgrids formed by collections of homes that integrate and coordinate energy applications.
Like the Internet that transformed virtually every aspect of how we do things, we can barely dream of changes brought by the emerging energy platform. Dramatically increasing the availability of energy, decreasing the cost, and integrating generation and consumption will lead to a very different and surely better world.
Energy combined with better management of materials could lead to local production of custom goods with 3D printing. Energy combined with desalinating seawater and purifying wastewater could solve our water scarcity. Harnessing energy from clean, circular hydrogen systems could revolutionize industry making low-cost shipping, high-yield food production, and civilian space travel more accessible and affordable. These are just some examples of the countless advances that will improve our lives. This is more than decarbonizing…it’s a new age of innovation.