Delivering on 2020’s Green Rallying Cry: A look to 2021 and Beyond

Posted: 16 Dec 2020

Marzia Zafar

Director of Sustainability & Policy

In this blog, I reflect on four key areas of the energy transition that have made great waves this year - domestic flexibility, electric vehicles, wind generation and smart meters - and share my thoughts on how we need to support their development as we drive towards net zero.

2020 set the stage for domestic flexibility, but will the market of this decade embrace and enable it?

The government’s Ten Point Plan and Energy White Paper, among other things, encouraged more EVs and heat pumps for UK homes. This, of course, means that the demand for electricity will increase. An average household in the UK uses about 3,700 kWh of electricity on an annual basis. An EV will add about 1,800 kWh to this total, while replacing a gas boiler with a heat pump requires a further 3,000 kWh of electricity. Currently, this results in a typical household’s electricity consumption more than doubling, and if this energy isn’t intelligently managed by the grid, people will end up paying double too.

Being able to optimise people’s EVs and heating systems so that they are powered by energy that is taken from the grid at cheaper and greener times of day, is going to be essential in ensuring an affordable, net-zero energy system.

If we don’t seize the opportunity for domestic flexibility now, then we are failing future customers who are willing and ready to engage in their own energy use and carbon emissions. Technology solutions are already here to deliver flexibility, next year we need to make real headway in unpicking the regulatory challenges that are standing in the way.

While the UK’s energy regulators are very progressive, the market is crying out for the right financial incentives in order to engage customers and accelerate decarbonisation. In 2021, we need to make real progress in implementing the reforms that have been endorsed. We need smart meters in every home, visibility of local grid constraints and more granular price signals – and the clock is ticking.

The UK can become the Saudi Arabia of wind, but we need to think beyond generation

The Government has pinned its hopes for a greener Britain on a mix of renewable energy generation. Wind power will form an essential part of this make-up, with ambitious targets to lead the world in this sphere. But to make this a reality, we need to rethink the way we handle these increased, and unpredictable, energy sources on our networks. That means storing energy at times of high supply and feeding it back to the grid when it’s needed.

In 2021, as people buy more EVs and smart-connected devices, our capacity to add domestic-driven flexibility to the energy system will grow. We’ll essentially establish a network of batteries in people’s homes that, with the right AI-enabled tech, can save them money, draw more power from renewables and help balance the grid.

By 2030, we could see as many as 2 million smart heating systems and 11 million EV chargers in people’s homes. This would add so much additional capacity to the grid that we would no longer need to turn off wind generators – preventing green energy from going to waste and helping drive significant cost savings. In fact, unlocking uncompromised wind generation through the power of smart homes has been forecast to save the energy £2.5bn over the next decade.

We’re already trialling how tech can best enable these substantial gains through work in Orkney, one of the windiest places in the UK. However, the government and regulators need to act fast in developing the right market conditions if we are to scale this pioneering technology beyond island community projects and harness the entire nation’s abundant wind resource.

 

Revving up plans to integrate 11 million EVs onto our grid by 2030

This year, the government made bold moves to put the electric vehicle (EV) rollout at the top of the green energy agenda by announcing a £49 million fund for green automotive projects as well as the all-important ICE ban, which has been brought forward to 2030. While there are already twice as many electric vehicle charging points than petrol stations in the UK, and the UK is now an EV charging experience testbed for auto giants including Fiat Chrysler Automobiles, unless we make these batteries on wheels work for the grid we are in for a bumpy ride.

Currently, owning an EV means adding 1,800 kWh to a household’s existing demand for electricity consumption. That is a 50% increase in electricity consumption for EV users, raising all kinds of financial and operational challenges.

Next year, we critically need to accelerate investment into EV smart charging and vehicle-to-grid (V2G) technology to ensure we efficiently manage additional and less predictable energy demand on the grid, and start reducing the cost of EV ownership. There is a window of opportunity to make smart charging mainstream – a window made even smaller with the ICE ban – that we literally cannot afford to miss.

Far from plunging customers into darkness, smart meters will enable a brighter energy future

2020 has seen the UK’s smart meter rollout plagued with setbacks, yet again, jeopardising the UK’s net zero target in the process, while risking a deepening of the years, even decades, of consumer disillusionment and disengagement with the energy market.

For far too long, customers have been captive bill payers. Energy suppliers have a task on their hands to turn their monthly transactions with passive customers into personalised engagement with prosumers, to guide them in decarbonisation efforts. Realising the UK’s greener, smarter grid will require digital transformation across every aspect of the industry, from generation, to transmission, to distribution, to what customers see on their phones.

Smart meters act as the gateway, displaying complete visibility of energy usage in a way that makes sense for all users. As a first step, we must demonstrate to consumers the ease of optimising technology readily available to them – smart connected devices in their homes that take-in and store energy when it is cheapest for them and greenest for the grid.

2021 is the time for us – energy suppliers, flexibility aggregators, distribution network companies, regulatory bodies and the National Grid  – to come together and remove barriers and create opportunities for the customer to become engaged and part of the energy transition. This starts with smart meters, visibility of the system, removing market barriers across the board and ensuring that customers get a seamless experience with fair bills.

About the Author

Marzia Zafar

Director of Sustainability & Policy

Marzia brings a wealth of Energy and Policy experience to Kaluza having spent over 20 years working on policies and strategies to enable the energy transition for regulators, business and not for profit sectors. In her most recent role, Marzia was Director of Insights at the World Energy Council and led a team of global energy experts on unlocking opportunities related to the energy transition. Prior to that, Marzia worked for Sempra Energy in Los Angeles and was a policy advisor for California’s energy regulator in San Francisco. Here she was instrumental in their smart meter roll out and in the early regulatory work to help legitimise ride sharing companies including Uber and Lyft. In her new role as Kaluza’s Head of Customer Strategy & Policy, Marzia will ensure that the consumer remains at the heart of the transition to a decarbonised energy system. Marzia has a degree in Business and Accounting from San Diego University, California.

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