At the end of March, the UK Government and Ofgem (the energy market regulator) published their overall strategy and timetable for the installation of 53 million so-called ‘smart meters’.
As well as making it easier for householders and small business to gauge how much energy they are using, energy suppliers will be able to read these meters remotely and offer variable tariffs.
But the meters are only the tip of the iceberg. The truly titanic shift in the way we see energy is predicted to be the transition to ‘smart grids’. A smart grid is defined as an electricity network that digitally integrates all the users connected to it and thereby ensures economically efficient, sustainable, high quality, secure power supplies.
Homes of the future
During EU Sustainable Energy Week in April the European Commission announced its plan for the expansion of smart grid technology across the EU.
The objective is an integrated European network that will allow suppliers to move energy loads when supply is low by offering customers variable tariffs to persuade them to use energy at different times. A new housing development in the Netherlands is currently conducting a two-year study to assess how flexible the residents will be about moving their energy demand.
There is already speculation that homes of the future could buy energy from multiple suppliers, possibly in a package with a leasehold appliance, and/or they might form part of a complex energy management system controlling a whole street or even a town.
But it is the expected reliance on electricity from renewable energy sources which will have the greatest impact on our industry, with the likelihood that energy supply will become unpredictable?
This is because we are reducing our dependence on fossil fuels which have been the basis for the UK’s National Grid. It is the coal and gas power stations that give us the flexibility to tweak our energy supply to meet expected surges in demand. It used to be the case that millions of people switched their kettles on as Coronation Street finished. While this is no longer as evident, we are used to our energy supplies being available 24 hours a day. You still see horrified references to the industrial action of the 1970s when energy was rationed in a rolling programme of power cuts.
But the future is likely to require a different attitude. While DECC predicts that there is sufficient natural gas to meet our needs until beyond 2030, nonetheless their vision of the future is an electric one, with battery powered cars, localised energy suppliers and most of our energy requirements met by a combination of nuclear power and renewable energy.
But without the use of the fossil fuel power stations to balance demand and supply we have a problem. Nuclear power stations are either on or off and take a long time to get from one to the other. Renewable energy supplies are only readily available when the wind blows or the sun shines – and we are not able to store that energy until we need it. Nobody wants to talk about power cuts – “energy rationing” is the accepted euphemism – but how can we manage demand?
The key question is how willing consumers might be to vary their demand to meet supply instead of expecting supply to be available at any time. In those parts of the world where electricity is only available at certain times people are accustomed to planning their energy use. In the future UK energy customers will need to think carefully, not just about how much energy they use, but when they use it.
It is suggested that domestic appliances would be programmed to operate at times of lower tariff electricity. Two key aspects to address before this becomes a reality are the physics of making the necessary electronic connections and the safety of their operation. And then there is the security of the data.
But ultimately the question remains – if some consumers are willing and able to pay for the convenience of using electricity when they want, how much will you have to pay before other consumers drop out of the bidding?
Maybe it’s not just your car that will need a rechargeable battery…