Can Distributed Energy Help Keep the Lights on after 2015?

by | Nov 7, 2012

Britain is facing the rising risk of an energy shortfall within three years, Ofgem has warned, as electrical generation will plunge to 4% spare capacity from its present level of 14%. Some 12GW of coal fired plants, equivalent to a sixth of the total generation capacity, can now only operate for a limited number of hours before they are closed in order to comply with the European Union air pollution regulations. Shortfalls could see the National Grid cutting energy to businesses by 2015, to “avoid families being left in the dark.” If no action is taken, there is a 42% likelihood that consumers will be cut off at some point in 2015 /16.

This is grim news, for even assuming that gas fired central fired plants and nuclear are ordered today, it would take five years for the former to come on stream. The utilities are in no hurry to invest in new gas plants until they know what subsidies will be available under electric market reforms that are over a year from completion. Ofgem said that little had changed since its last report in 2009 when it warned that the financial crisis, tough environmental targets and the closure of old power stations threatened security of supply.

Nothing is mentioned about the part renewables will play in averting this crisis, so we assume that it has already been factored into the equation. Are we left just accepting it  as a fait accompli, or ignore the pollution regulations and pay a heavy price?

Distributed power can make a serious contribution to both delivering power at current market prices and reducing CO2 emissions, but it requires the utilities to buy into this new model and at the present time they are reluctant to accept or pursue this possibility.  They want to continue the central model of large scale production and distribution, a one-way flow of electricity from them to the consumer. They are embracing smart meters as the first plank in their smart grid strategy; this gives them information on domestic consumption, demand patterns and the possibility to smooth demand by variable pricing. More importantly to them, it gives them automatic billing which provides a direct return on their investment.

Making the distributed network smart and investing in communication networks which would provide value add services that would ultimately deliver revenues greater than supplying electricity are of significant interest to them; but they only want this within their time frame and control. Provided they continue to deliver electricity to both domestic and industrial users, they can be assured that they keep control of setting the policy and timetable for the smart grid. But this grim news from Ofgem now shows that there is a serious doubt that we can leave them to just get on with the job.

Distributed power has sufficient scale to make a serious contribution to our electricity generation. Industry has been concerned about the rising cost of power and large companies have been investigating a return to producing their own power whilst those that operate combined heat and power units are installing new more efficient systems and selling electricity into the grid. This all makes the proposition even more attractive. I would image the Ofgem announcement has now got them concerned not just about cost but reliability of supply.

Distributed power does not stop with industry. There are now hundreds of smart buildings that deliver energy efficient relatively clean power and through their automatic controls and interfacing software with the grid they can become virtual power units. Whilst we are not suggesting that our present dilemma can be solved through distributed power, it could certainly help.

Distributed power should be a part of the new model of electrical generation and distribution, enhanced by virtual power plants, delivered through industry, public and smart buildings interfacing with smart grid. Government cannot sit back and let the utilities decide whether distributed energy can join the party.

Allan McHale, director of Memoori, has a career that spans 40 years in the Energy and Building Controls Industry. In 1980 McHale formed Proplan to provide consultancy services in marketing and business development of products for security, safety and environmental control in buildings. In 1998 Proplan was merged into a new start company, i&i limited in order to provide more comprehensive solutions to both the demand and supply side of intelligent and sustainable buildings. In 2008 the assets of i&i Proplan were acquired by BSRIA Ltd.

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