The Distributed Energy Resources: Digitization & IoT Conference gathered prominent analysts, policy makers, business leaders in Vienna this week. With a focus on new types of energy generation, the event set out to focus on answering the key questions dominating the energy discourse: What is the role of distributed renewable energy in a low-carbon future? What ‘smart solutions’ are available to enable such a transition?
Representing Faraday Grid, CEO Andrew Scobie put the emphasis on the how rather than the what of the popular questions in his presentation.
Decarbonisation, Digitalization, Decentralization and Democratisation - the 4Ds of the ideal energy system project an ambitious future. But getting there will require more than simply adding new elements to the existing system.
A grid designed for central, one-way delivery of readily dispatchable thermal generation will not cope with the exploding number of variable generation and a plethora of new technologies. A systemic redesign, a fit-for-purpose platform is needed to deliver on the promise of a greener, reliable, and affordable energy future.
Read Andrew’s speech, titled ‘Reinventing the Electricity Grid as a DER Platform’ below.
I’m very pleased to speak at the Distributed Energy Resources: Digitalization & IoT Conference, particularly here in beautiful Wien.
This is a city I spent many happy years in and I will always find the time on my schedule to come back here, especially for an important gathering such as this.
As I prepared my presentation for today, I carefully reviewed all the keynote speakers who will no doubt deliver excellent remarks over the coming two days.
Engineers. System Designers. Chief Innovation Officers. All of us will be in general agreement about the positive effects of distributed energy resources (DERs).
I’m also certain we share the same viewpoint that a rigid, centralized top-down electricity system is a thing of the past.
However, where I may disagree with most of my colleagues is that just plugging in more DERs into the electricity grid will unleash the so-called “4D Revolution”: Decarbonisation, Digitalization, Decentralization and Democratisation.
I’m here to argue today that due to the limitations of the historic electricity grid, the only 4Ds that we are going to achieve are disruption, destabilization, disappointment and destitution. Only radical change of the energy system will allow us to achieve the affordable, low carbon future we all seek.
Globally, electricity systems are failing.
Each day, week and month, we encounter sobering economic and environmental analysis which show the critical challenges we face in the 21st century simply cannot be resolved with the 19th century’s electricity architecture that we’ve inherited.
And these challenges are frankly brutal:
Recent Nobel Laureate William Nordhaus found that the Present Value of limiting global temperatures to 1.5°C is 37 trillion US dollars, a staggering 50% of global GDP.
As we are in the heart of federal Europe, let me bring this closer to home.
The EU has promised to cut emissions by 80% by 2050. A study of seven peer-reviewed models finds that to address this target, costs would rise to 2.9 trillion Euro annually - more than twice what EU governments spend today on health, education, recreation, housing, environment, police and defence.
Pushing hard for carbon reductions and renewables before addressing the energy technology deficit is a road to serfdom.
And this problem is evident in the rise of DERs.
The Problem of DER Increase
While DER penetration presently remains low, it is forecast to grow rapidly across the global energy market.
Global DER capacity is anticipated to increase by 400% over the next decade
In my native country of Australia, it is projected that over 40% of energy customers will use DERs by 2027. By 2050, that figure will grow to more than 60%.
In Australia, six solar PV panels are added every minute, leading to a situation that the Energy Security Board has labelled “anarchy”.
And today in the United Kingdom, there are more than 1,000,000 points of energy generation. As recently as 2004, there were only 80.
A centralised rigid system simply cannot manage this – it would be like having one control room for the entire internet.
What’s required is an open and de-centralised energy platform to enable millions of users to connect. And at Faraday, this is exactly what we’ve done.
History of the Grid:
But as the philosopher George Santayana pointedly said: “To know your future you must know your past”, so before we talk about solutions, let’s talk about history.
The biggest and most sophisticated machine in human history, the electricity grid, didn’t appear out of nowhere.
The Grid unlocked the greatest economic gains in human history by allowing us to empower our technology. Lifting billions from premodernity’s grinding poverty. With billions still in poverty, this task is still not complete.
Furthermore, electricity is the primary input to prosperity, not was. Destroying the economics of energy directly undermines productivity and the prosperity it develops.
The Grid: the great engineering triumph of the twentieth century is now turning out to be an exceedingly poor fit for our future.
The hub and spoke grid is a rigid, passive, one way delivery system, that must prioritise system stability before all else.
Centrally controlled, it is balanced volumetrically as it attempts to maintain stability and is simply unable to prioritize the cost of energy to consumers.
Historically electrons and inertia were provided as a bundle, by large principally coal fired generators at the centre of the system.
However, our values for an energy system have fundamentally changed. Unfortunately, the grid has not.
Yet the grid remains the indispensable central nervous system of both our economic and social order. And as we gather here today, focusing on the role of the electricity system is simply essential to resolving the existential tension between the environment and our human welfare.
The Grid Today:
The Legacy Grid delivered on its design scope, meeting the values and enabling the hopes and dreams of 19th century citizens.
Now, the Legacy Grid is being asked to handle variable renewable energy, transport electrons and to balance supply and demand in a decentralised world that is increasingly and inherently unpredictable
All while remaining rigid, passive and fragile.
But the Grid was only intended to be a transportation for an energy system with huge spinning generators at its centre providing the essential inertia that stabilised that system.
In pursuit of our modern values and ambitions we have crammed the grid full of volatile renewables. Our future suggests loading the grid with a host of new DER technologies, which will ultimately lead to an increasingly unpredictable demand, while removing the stabilising central generators in direct proportion.
Therefore, we continue to spend more on balancing costs and expensive Band-Aids that only address symptoms. We are constantly chasing our tail.
Right now, we are at an historic junction point. The decisions we make about the future of energy could lock us into a path for centuries to come.
So what’s the solution?
If we are serious about decentralising and decarbonising our energy system, while improving living standards, then revolutionary technology breakthroughs will be required.
Allow me to return to my earlier analogy about the greatest machine of the 20th century - the Internet.
We have an opportunity to reimagine the grid according to modern values and make it future proof. Not to simply download a patch for the Legacy Grid.
The Grid of the Future cannot continue to suffer from the limits of central command and control. To do so will dramatically reduce the choices of future generations.
Imagine instead the Grid as a platform for Smart Cities, EVs, domestic prosumers competing as suppliers of energy. Competing so well they don’t need to be subsidised.
The grid as an endless platform for innovation.
The Internet of Energy - decentralised control and permissionless innovation.
The internet creates an evolving space for innovation, cheaper prices and greater security. These three characteristics of the internet are not in conflict with each other. On the internet, the trilemma does not exist.
By reinventing the electricity platform as a DER platform, we at Faraday have made this possible.
The Faraday Grid:
The Faraday Grid is the internet of energy.
The Faraday Grid is a system of decentralised control that puts the grid at the centre of our energy system for the first time ever in history.
Built on Faraday Exchangers, they provide the inertia that allows it to be agnostic to the nature of supply and demand.
The Faraday Grid dynamically balances power flow, voltage, power factor, and phase, while removing all harmonics.
A plug and play device, it drops into the legacy Grid in the transformers’ location, just as we dropped routers in to create the internet without disturbing the telephone system.
A unique feature of the Faraday design is that we can reinvent the grid from one exchanger at a time, there is absolutely no need to rip up the existing grid and start again.
The Faraday Grid can increase grid tolerance for renewables to 90% and reduce the cost of energy to consumers.
Faraday Grid comes preloaded with Emergent.
Emergent is a transactive grid protocol that will enable consumers, utilities, disruptors and generators to buy and sell energy at the lowest marginal price.
Put simply, Emergent is the eBay platform for every DER on the planet.
What This Means:
We at Faraday already knew that our technology would balance the energy system at the lowest marginal cost, while increasing network capacity and efficient integration of renewables.
And now, leading researchers and testing facilities around the world have validated Faraday’s revolutionary capability to resolve the energy trilemma.
Only last month, UK Power Network (UKPN) announced that it would deploy Faraday technology in its existing London network for live testing in spring 2019.
UKPN described our technology as “revolutionary”, a system that can adapt to “variations in the network to maintain stability, providing inertia and primary frequency response.”
Other strategic partnerships in Europe, North America and Asia-Pacific are to be announced shortly, demonstrating our technology’s ubiquity.
Friends, our energy market faces two clear choices:
Do we continue down the same tired path where DERs are considered by utility providers as a liability and a threat to economic security?
Or do we introduce a new electricity system that enables an ecosystem of DERs to connect and transact using distributed price signals?
By reinventing the grid as a platform for innovation through common operating protocols, DERs can become an asset for society. The Faraday Grid will make this happen.
The Faraday Grid is an energy system that enables rather than constrains human ambition.
Our future doesn’t need to be more rigid, more expensive or more vulnerable.
We can have a low carbon future of greater prosperity and human choice
Faraday seeks to enable sustainable prosperity for all and I look forward to you joining us on the journey to achieve the 4D Revolution we all know is possible.