During the same month in Japan – another iconic island grid – cold weather triggered its worst electricity crunch since the aftermath of the Fukushima crisis. It led to extremely high electricity prices as demand spiked and the system had to resort to oil and coal to avoid grid breakdown.
The good news is that although controlling the weather is out of our hands, we can take control of demand. This is being made possible by digitising, connecting and optimising millions of distributed, low carbon devices – creating a whole new dimension to our energy systems.
But first, a quick history lesson
In 1891, the world’s first centralised coal fired power station went live in the UK. It ushered in a new form of power for the 20th century and, remarkably, the model developed then still dominates power systems today. Centrally generated electricity, a linear distribution network, and customers at the end of a very long wire.
It has meant that every electrical system around the world has been built on one underlying truth – it is impossible to store electricity economically.
In the last ten years however, the energy storage market has boomed. As well as grid-scale batteries, devices such as electric cars, heating systems and storage batteries in people’s homes can now store abundant green energy for use later in time, when demand increases. In effect, this network of millions of devices produces a giant distributed battery spanning vast geographies, allowing us to capture green generation whether in demand or not.
But new technology is taking us one step further. Advances in data-enabled software and AI are making it possible to intelligently manage the movement of energy from the grid to devices and even back to the grid via vehicle-to-grid (V2G) chargers. Leveraging real-time data including wholesale energy prices, supply and demand levels, and weather forecasts, smart platforms can optimise device charging for when it is cheapest and greenest.
This digital innovation unlocks new opportunities for energy systems as they manage increasing grid volatility caused by the integration of more intermittent renewables and millions of EVs and other electric devices. By using the energy stored in devices to increase supply, or delaying charging so to reduce demand, energy storage and intelligent management helps reduce the ‘peakiness’ of demand on the grid and consequently reduces the risk of imbalances and outages.
Taking Texas as a recent example, green reserves in cars, storage batteries and heaters across homes, if optimised by smart technology, could have smoothed out the demand peaks that led to rolling blackouts and potentially have enabled more homes to stay on supply.
The opportunity for Texas
Of course, technology would not have solved all aspects of the challenges the state faced a few weeks ago, but the nature of its current system makes it well equipped to utilise smart optimisation. For example, over half of Texas’ 9.6 millions homes already use electricity as their main source for heating and the market has the required levels of data granularity needed to inform the intelligent control of devices in line with the grid’s needs. By utilising intelligent software and implementing the right mechanisms, the load from these heaters can be managed to reduce the overall electrical heating load in Texas by up to 9 GW. And in instances of extreme weather where the network reserves are low, this could play an important role in mitigating the effects of imbalance. Similarly, air conditioning units could be leveraged to create grid flexibility during the summer.
The state’s very lack of regulation and connectivity means it is uniquely positioned to leapfrog much of the journey other markets are now undertaking in digitising their systems.
As cloud-based software, smart optimisation platforms do not require the same physical infrastructure that underpins electricity systems today, saving on costly reinforcement. It also encourages the use of locally-generated energy, reducing the need for more sprawling infrastructure that is prone to damage in extreme weather as we saw when pipelines to Texan generators froze.
Texan customers stand to be better protected and even financially rewarded too. By allowing technology to manage their device charging, new services and tariffs can be designed by their energy suppliers. For example, EV charging tariffs that give customers a cheap, flat rate regardless of what time they plug their vehicle in, offer protection against spikes in wholesale prices which we saw skyrocket from $50 to $9,000 per MWh across the state. If Texas wants to seriously decarbonise its grid, then making the transition affordable and accessible for consumers will be essential. AI that does the hard work for them will help ramp up the adoption of low carbon technology.
A pivotal moment
Today’s grids are still anachronistic, fossil fuel-centred systems. They have been built over many, many decades and it will take time to untangle them. New markets, incentives and governance will be needed in order to transition successfully to systems that are effective and zero carbon. Although no silver bullet, digital innovation can play a crucial role in smoothing out volatility and keeping the lights on when inevitable grid constraints occur.
No doubt, 2021 will see more examples of grids struggling to grapple with the elements and changing demand. However, if in this moment of reflection and recovery, Texas decides to digitise, it could prove a pivotal moment for energy systems everywhere.