In the not too distant future, it will be the endpoints of the electricity grid (consumers/prosumers) that manage the supply, balance the load, maintain the frequency, generate and store electricity as well as trade those services between each other. The all-powerful centralised electricity system that carries out all those duties today will still exist, but as the base system, the backbone, the fallback.
Those in the electricity sector know that major disruption is occurring within it but it probably isn’t that obvious to the average ‘punter’ who pays his or her monthly bill and flicks the switch whenever she wants to get a service (a right!) that everyone takes for granted.
There is a growing understanding that solar panels can supplement a households electricity supply and that any excess can be sold back to the grid, although there is a lack of understanding about the cost of transmission and distribution and hence the large difference between the cost of a kW purchased from the grid versus the price received at your front door for a kW sold to the grid. The number of households and businesses interested in generating and storing electricity for later use is growing as is the number of people who are buying Electric Vehicles (EVs). This means that the knowledge and understanding of a growing number of people about how the electricity ‘market’ works are also increasing. In these early days the motivations and drivers of these early adopters are not necessarily financial (a point many stalwarts of the electricity sector seem unwilling to grasp) but are made up of a myriad of reasons from the feeling of ‘control’ to the desire to do their bit for the environment and society.
Along with these new energy technologies, there is also a continuing (some might say unrelated) growth in connected things and the associated ‘app’ that can remotely control the settings of whatever it is, home security, garage doors, heat pumps, house lights and even appliances like fridges (As an aside, dining with a relative in Christchurch last week was interrupted by an alert from his phone telling him the fridge door at his Melbourne home has been open too long).
These connected devices are more gimmick than essential at this stage, but they are serving an important step in the eventual democratisation of the electricity grid. They are showing the owner/user/consumer how easy it is to securely monitor and control things at the ‘end point’ of the grid, the home/business/factory (Security is a whole separate story but we need these early low impact services to allow any flaws or problems with security and privacy to become visible and fixed).
The real value of these ‘apps for anything’ is that the next step from a 1-1 service (home owner-home device) is for the homeowner/user to choose to join with others, if they want, to allow their group of like-minded peers to pool their resources (data and control systems) and offer them to other parties for a financial or societal reward. In the electricity sense, this means groups of consumers grouping their solar generation, battery storage (including their plugged-in EV), current load, and ‘time of use’ behaviour together and offering it to others such as their local distribution network for peak load or electricity frequency management or offering excess generation to other consumers via peer-2-peer trading.
Ok, there are geeks interested in doing this stuff and then there are the other 99% who really can’t be bothered, but if services were available to automatically do this and provide a financial return with only the need to ‘opt-in’ or ‘opt-out’ then the 99% will be very interested. And so the Grid Edge platform is born. Prosumers/consumers end-users need a place to ‘point their data and devices at’ and to easily join and set up (and forget); then they sit back and reap the benefits of their joining and those benefits can be many and unrelated or additional too any utility paid for benefits. Distribution utilities (and Transpower, the System Operator) need a place to securely connect their network monitoring and control (SCADA) systems too and to send requests to groups of endpoints (consumers and prosumers) on their networks to enable load shifting, frequency management, and straight demand response without having to invest in connections to specific devices, appliances, motors, inverters, batteries, and EV charge-points. The benefits to consumers of connecting to a platform will extend beyond energy use to things like home health and security making connecting to the platform worthwhile.
There is no point in 29 distribution companies creating individual propriety platforms to connect devices they are interested in controlling. The result will require network companies to choose devices and technologies to back, increase network costs and hope they get the interest of consumers. Consumers want choices in devices they use to manage their lives and don’t like being locked into something that delivers less benefit than another potential solution they have identified.
In the end, it is all about the steady movement of services and control from the centre of the grid to the edge. The ability of all consumers and prosumers to be able to access and participate with each other in the energy market. That’s my definition of democratisation.