Will solar photovoltaics spell the end of electricity grids?
Hardly. Solar PV’s just one leading edge of a much larger story.
Networks will play just as important a role in the coming low-emission energy revolution as they did in the 1990s information revolution.
That’s because energy and data needs to flow both ways. This allows markets to arbitrate between buyers and sellers and price signals to work.
It’s this relative price fuel switching capability that will solve climate change, not a single technology by itself, nor even a cluster of technologies. It’s the changing relative cost of all technologies over time that will do the trick.
For that trick to work, more interconnected markets and networks are needed.
This will require a complete revamp of the global energy delivery system away form regional monopolies and toward open markets governed by ‘open access’ infrastructure.
In telecommunications, this ‘open access’ infrastructure has been provided by fiber optic cables and wireless towers. In energy, it will be provided by multi-fuel pipelines and high-capacity High-Voltage Direct Current (HVDC) power lines.
The underlying units of account will be — essentially — ‘packets’ of energy, just as data packets have underpinned the information revolution.
Just as it was with information, the future energy story will be about networks: standardization, fungibility, interconnection. The only difference will be that the freight of the low emission energy revolution will be kilowatts or kilojoules of energy.
Carbon pricing will create new spot, futures, options and derivatives markets to balance today’s and tomorrow’s supply. Interconnected networks will push and pull energy between producers and consumers to even out the load between surplus and deficit. Transparent market signals will lead the way for investment.
None of this will be possible through the ‘islanding’ approach of consumers simply going ‘off grid.’ That creates diseconomies of scale.
The result of all this future energy networking will be rising living standards as investments in reducing destructive climate change create the biggest economic stimulus the world’s ever seen. It’ll almost certainly be than the 1930s’ ‘New Deal’ that ended the US depression. It’ll be bigger than the technology revolution.
Huge new intellectual property and innovation will be unleashed upstream and downstream. This will range from new energy technologies like wind, ocean energy, geothermal and biomass to household. It will also more deeply integrate neighborhood, city, state and country networks more deeply.
Twenty years ago, one could only watch television broadcast from central stations, from upstream to downstream. That’s the current model of electricity. Then came home video. That allowed people to watch programs they chose using hardware independent of the television broadcast system. That’s the analogy of ‘going off grid’ with solar PV.
But the data revolution moved on to shared ‘user-generated content’ put into a pool, allowing much more media to be produced and consumed. That’s what networks will bring to energy.
As such, future grids may be less about satisfying instantaneous marginal power supplies than about using a flexible redistribution network to shuffle surplus power around to where it can be used to top up supplies at the fringe.
This development will make the network less brittle. A Hurricane Sandy would be less devastating since downed power lines need not interrupt power to end consumers with storage installed — at least over a short-term period of hours or days.
All of this requires rethinking the grid as we know it. But one thing’s for sure: the grid won’t disappear. It’s task will change, though — mightily.