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18 December 2014

A Future In The Dark

Written by: Rob Sinclair, Senior Account Executive at Edelman

Energy

There is a ‘tsunami of change’ coming to our power networks as we move towards a low carbon economy. The UK needs to invest £110 billion in modernising its electricity infrastructure over the next decade.

Over the next 10 years, Britain will decommission most of its aging and dirty power stations with the majority of coal-fired power plants being shut down by 2023. In parallel, the UK is increasing its use of renewable energy as it aims to meet legally binding targets – 30% of electricity generation from renewable sources by 2020.

Traditional thermal generation, typically from fossil fuels, is under increasing pressure from climate change policies, volatile commodity markets and the rise of renewables. Power providers are facing what Peter Terium, chief executive of RWE, the German utility, has described as the ‘worst structural crisis in the history of energy supply’.

During this transition, the role of communications is key. Why? Solutions that will play an increasing role in supporting the grid going forward, such as energy storage, can be bewildering to an industry that has stayed largely unchanged since its birth. Clear and simplified messages are vital to inform stakeholders, including governments, supply chains, and investors, of the benefits that storage solutions offer, such as improving security of supply, economic revenues and job creation.

Communications enable cleantech businesses to establish credibility by implementing campaigns to exhibit their technologies and demonstrate technological readiness, reliability, economics, and to confront potential misconceptions.

Prior to joining Edelman’s cleantech team, I spent several years with a leading UK energy storage developer. Communications were fundamental in achieving strategic objectives, from raising capital to grant funding, or attracting new commercial leads through media campaigns; effective communications can take businesses to the next stage of their commercial lives.

In order to make the necessary replacements and upgrades, Ofgem and the Department of Energy and Climate Change (DECC) are assessing a range of new technology investments that will decarbonise the network, whist ensuring security of supply.

Two technologies expected to play a major role in balancing the grid are Electricity Storage and Demand-Side Response (DSR). Storage solutions provide the capability to capture ‘wrong time’ energy from renewables, and DSR can dynamically manage power demand from heavy energy users.

Due to the challenges power grids across the world are experiencing, energy storage continues to experience huge global growth; it is seen by many as the ‘holy grail’ because it solves the problem of grid variability by absorbing surplus or off-peak power and releasing it when needed. Europe’s largest battery storage trial, a 6MW/10MWh project, is currently being installed at Leighton Buzzard in the UK, while in the US, California has set a mandate to install 13,000MW of energy storage by 2020. Other countries, including Germany, India and China, are all setting their own energy storage incentives.

Utilising the power of the internet, DSR interacts with the equipment operated by heavy energy users, from fridges to furnaces, in order to lower demand on the grid. Sainsbury’s and the UK’s largest water company, United Utilities are two companies trialing the technology. Demand response is a ‘win-win’ for the grid, protecting supply whilst simultaneously creating revenues for participants. Open Energi estimates the opportunity for large energy users to be around £1 billion a year.

The global market for clean technologies will triple to $2.5 trillion over the next six years; the investment is there, the technologies are ready, but if cleantech solutions are to realise their full potential, it is vital that the business case is proven in a range of scenarios in order to build confidence.

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