Renewable Energy II

The future of central grids – can crazy ideas make a new world?

by Saliem Fakir

Is it possible that we can envisage a new world in which the central grid gets outdated and a more diffused and dispersed system takes its place? Is this wishful thinking?

In a recent McKinsey report (May 2013) on disruptive technologies such an idea has been mooted but like McKinsey predicting the future can be a perilous thing – you can be hopelessly proven wrong or even be surprised by the radical change that even your own meagre predictions could not match.

If, our starting point is that there is a parallel process of a low carbon transition future from an initial high dependence on fossil fuels, to an intermediate phase of a mixed system, to total dominance by low carbon solutions and technologies than an emergent self-generating and autonomous grid system is possible.

Such a system should be flexible, resilient and adaptable to changing conditions and technology shifts. It is possible that distributed generation with enhanced grid capacity that involve both bulk transmission and mini-grids could be the future direction in which power supply will become the dominant feature of energy infrastructure in the next 20 years.

A silent revolution, that is already on the go within the existing system, could bring about a paradigm shift in the way we think of energy planning, especially for electricity and central grid models. These pathways already exist as more and more modular technologies in the form of renewables, fuel cells, gas turbines and other forms of modular power solutions begin to gain momentum and critical mass.

These have profound implications for current pathways that reflect a specific operating, planning and management model. Our view is that, if these do get to scale and become cost-effective, the central power system models will have little future as power generation will mostly come from modular systems that both feed the grid and use the grid to store energy. The idea of the grid will be flipped on its head: it will become a system for storage rather than transmission.

The dominance of a particular paradigm for energy planning dictates policy, the regulatory and institutional environment. Everything in its design, enactment and ways of investing lock the overall system along a particular pathway. These pathways are vulnerable to systemic risks and rapid shifts in disruptive innovations and technologies. Modular technologies and systems can be classified into different generations – first, second and third generation technologies and systems. The first is bulk and base-load systems that are inflexible, have long lead times and have slow response times to demand and supply fluctuations.

The first generation system is also centrally controlled and supplied. It is highly reliant on a strong tax base and central government spending.

Second generation systems include more intermittent sources with a mix of distributed generation but still dominated by bulk power generation investments such as large coal-fired power plants, pump-storage, nuclear and others.

And, finally, third generation sources will have predominance of distributed generation with less dependence on base-load solutions.

Third generation technologies are more likely to use multiple technologies integrated into one system – such as information technologies, remote sensing, bi-directional smart grids, hybrid energy stems that combine base-load and intermittent sources, and new types of technologies, with special composite materials, that can be controlled remotely or through self-adjustment and adaptation systems. Some of these technologies are already available on small scale or as demonstration projects. Third generation technologies are dominated by distributed generation, more responsive to supply and demand due to smart grid technologies and are self-adjusting as well as centrally managed.

The crucial thing is to understand how the enabling policy, regulatory and institutional environment operates in the current context, whether it’s design is structured in a manner that inadvertently predisposes the system for a particular model and approach to energy provision. The question is: can such a system be changed or reformed to allow a system to adapt to second and third generation options and technologies. In so doing allowing public and private choices to change flexibly to new types of pathways that allow the potential for systemic risk and collapse to be averted or alleviated through a more open and democratic and participatory energy system. Such enabling mechanisms for different pathways to evolve in co-existence will be the most optimal system design. With the proviso being that such a system prevents what a locked-in system can do, which is have the potential for inflexibility, increased or uncontrollable costs because of capital costs, currency volatility, large maintenance and fluctuating fuel costs.

A distributed generation model also reduces the burden on the state in terms of capital and investment allocation for bulk infrastructure. This burden can be shared if the energy system and regulatory environment allows for greater participation from users – who could also be buyers and sellers at the same time. All of this has to happen within a carbon constrained world, ensuring energy security that is affordable and driving new energy enterprises within the South African economy.

Mohamed Saliem Fakir

Senior Manager

Head of Living Planet Unit: WWF-SA

Read more about Saliem and his view on being a futurist.

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