2015 was a big year for renewable energy with plummeting technology costs and booming global uptake of renewables, culminating with historic outcomes and commitments for moving forward from the COP21 in Paris. I previously wrote why I was optimistic about renewable energy last year and now looking ahead in 2016, there are powerful trends that signal the continued massive transformation in the world’s energy infrastructure.
In particular, three elements, rapidly emerging and working in unison, outline how the changing nature of the energy economy will look in the near future. These are decentralised microgrids, highly sophisticated IT controls, and cloud-like storage solutions. The picture being painted is not only innovative, but also remarkable and exciting, and for entrepreneurs, investors and consumers, opportunities abound to engage in this revolution.
The tenents of the sharing economy are beginning to permeate into the energy industry, disrupting the traditional model of centralised power plants controlled by the utility companies, and transferring control of energy generation and distribution directly to the consumers. As residential and commercial renewable energy installations such as rooftop solar become more and more widespread, potential opportunities for collaboration increase as independent installations are connected through integrated technological networks.
By linking multiple, small-scale energy sources (such as solar photovoltaic panels, fuel cells, wind turbines, and biomass-fired power plants,) a “microgrid“ can be created to generate energy locally and service the associated neighbourhood, business park or campus facility.
The microgrid has clearly defined electrical boundaries and acts as a single controllable entity with respect to the main grid. A microgrid can connect and disconnect from the main grid to enable it to operate in both grid-connected or island-mode. These modern, localised small scale grids offer protection from mainstream grid outages by isolating themselves and independently delivering continuous power within the boundaries.
Technology innovation has created sophisticated energy management systems that now enable these microgrids to deliver a diverse mix of distributed energy sources based on optimal load requirements, offering peak time energy shaving solutions and supported by state of the art storage capacity.
The results are small-scale electricity-generating powerhouses, greater than the sum of the parts, that can balance and smooth variations in energy supply, provide services such as voltage support and frequency regulation to the conventional grid, and export electricity to the larger grid to make a profit or provide a boost during emergencies.
In recent years, large scale investments and high profile partnerships have advanced the industry to push the boundary of possibilities for efficiency, automation, design and functionality. Such innovations include: autonomous dispatch and load preservation controls; operation of independent zones within the microgrid; autonomous economic optimisations by energy price forecasting; and interwoven, balanced energy generation sources. Here’s a short video of one of the most state of the art systems.
Here in Australia, Flow Systems is working with LWP developers to build an entire new suburb in Huntlee that will not connect to the grid at all. Instead, the development will be built with a renewable energy based power generation, slated as Australia’s first town-scaled microgrid. Employing innovative technologies, the proposed development could see up to 7500 homes powered entirely by off-grid renewables.
The ‘Building’ Internet of Things
The Internet of Things has come to buildings. The idea of “smart buildings” has been around for many years, but due to most components operating on proprietary systems, whole house interconnectivity has been limited and lacking in holistic functionality. With a common IP platform to link all sensors, controls, systems and monitoring, the “Building Internet of Things” can optimise the building for maximum performance. It is now possible to connect any device on the network to any other of whatever functionality and through sophisticated software and data analytics, make sense of the systems interactivity and immediately fine-tune and automate the process with reduced need for human intervention.
The Building Internet of Things is forecast as a huge growth industry increasing from $25Bn in 2015 to over $85Bn by 2020, and encompassing a wide range of applications beyond just energy use (such as security, fire prevention and usage monitoring). In the emerging trend of Zero Net Energy Buildings, controls are 100% critical to achieve successful ZNE outcomes by ensuring the implemented systems are functioning to their fullest potential of achieving maximum energy optimisation.
The complexity and sophistication of the controls systems extend well beyond the historical use of basic building monitoring and now includes lighting and temperature regulation, discrete building system operation, individual equipment control, windows and ventilation activation, and is even connected to each plug outlet. The systems can use a combination of automated and manual controls to adjust the building’s environment, for example when occupants manually open windows, the HVAC zonal programming is overridden until the window are shut.
The boundary for controls is also expanding beyond the building and into the microgrid as distributed generation, demand response, and onsite storage become part of the new bilateral transaction of energy with utilities and other providers of services.
Despite the importance of automated integrated controls, the systems still must rely on the occupants for some part of the success of the controls operations. Detailed analytics and real time reporting allow for and promote active human engagement in facility operation. The highest performing buildings have engaged operators and occupants standing on the shoulders of intelligent and integrated controls systems.
Our buildings are rapidly becoming data rich environments where the challenge is to utilise existing infrastructure alongside new information technology to find value in the data in the pursuit of optimisation. There is presently still a gap however between the information technologies and the building hardware systems, but the two industries are continually moving closer together to form alliances that deliver fully integrated products.
If nothing else, Tesla’s entry into the energy storage market has brought the focus on the storage aspect of renewable systems to the forefront in what some are calling the “the energy storage zeitgeist moment.” Tesla’s slick marketing and trendy branding have brought a “coolness” factor to batteries that will only help drive the momentum faster in an industry that is already poised to explode in the coming years.
Australia is set to be one of the largest markets for battery storage due to the high cost of electricity, the huge numbers of households with solar panels and excellent solar resources. The Climate Council of Australia is predicting that battery storage capacity installed in Australia will grow 50-fold over the next 10 years, and that up to 50% of all households will soon have solar systems with battery storage. Tesla, Panasonic, Enphase and Orison are all rolling out their storage systems in Australia this year in an attempt to capitalise on the ripe conditions for the energy storage market in the country.
Globally, lithium battery producers are ramping up their ability to supply the expected boom in demand. Of course we have heard all about Tesla’s Gigafactory which is reported to be already producing batteries in Nevada. In China, both BYD and Samsung have also recently brought large facilities online which reportedly rival Tesla’s operations. The net result will be significant reduction in prices of battery technologies leading to an increase in uptake by consumers.
In the same way that decentralised power generation functions in the microgrid, distributed energy storage in the form of several small battery systems allow for greater security against overall failure, increased efficiencies and consumer control, and optimisation for energy costs.
The news isn’t all about batteries, however, as again the energy industry is following wider trends by adopting the concept of the cloud. The emerging energy cloud is a consequence of electricity being generated at several locations and managed by smart systems to redistribute as required by demand needs. Thus the concept of “storage” becomes wider than the idea of electricity sitting dormant in an isolated battery.
The sharing economy is quickly applying itself by offering services in this environment by allowing users to access the benefits of the energy cloud with a peer to peer trading platforms. The “Airbnb for Energy” business model is taking off in the United States, Germany and the Netherlands, and is even enabling consumers to participate in the renewable energy boom without owning any part of a system.