Poles apart – why the grid edge holds the key to rethinking our energy system
On Tuesday 21 April, in the middle of the COVID-19 lockdown, the National Grid had a problem. Demand for electricity on the grid was down 15% – a recurring trend seen throughout lockdown. Normally this wouldn’t be a problem, but paired with the fact that it was also a particularly windy and sunny day so there was an abundance of green energy in the system. Oversupply is a big challenge for the grid and rather than turn off the generators, the National Grid tried to ‘flush out’ the power through consumers or cut off green supplies. As a result, prices went negative in the UK from 9am until 4pm and customers were actively encouraged to use electricity and be paid for the privilege.
Now I don’t know about you, but if I’m telling my children a bedtime story about the electricity grid – and as the CEO of Siemens in the UK, this of course happens a lot – I want to be able to tell them about a modern, digitally-driven, decarbonised, decentralised and agile grid. Not a story about a system that simply turns off or ‘vents’ renewable energy because of limitations in the delivery mechanism. What I want to focus on is the very architecture that is underpinning our electricity network and ask, where does its next evolution come from?
From frippery to function
Before the National Grid was set-up, and in the period between 1880 and 1928 (when the first pylon was erected), there were 572 local energy suppliers and almost the same number of ‘power stations’ – so ironically, it all started with a decentralised system. But with that came multiple problems – sporadic voltages, intermittent supply, low resilience and most importantly, high cost. For those in Victorian Britain, electricity was eye-wateringly expensive. Keeping just five light bulbs lit for one day cost the same as a week’s wages and, in 1920, just 6% of the UK had electricity. It was a rich man’s pursuit and seen as something that was ‘novel’. As Werner’s brother William Siemens identified, being an inventor is nothing without a practical application of your idea. What good was this new invisible force if it couldn’t be used and enjoyed by everyone?
Conservative PM Stanley Baldwin saw in 1926 that Europe had stolen a march on the UK as he realised electricity’s great potential within industry. The 1926 Electricity Supply Act would connect 122 of the most efficient power stations in the country. In fact, the first regional grid was established right here in my neck of the woods, the North East, in 1914 by Charles Merz. His motivation: a cheaper, more accessible route to mass electrification, based on interconnected power stations delivered through high-transmission lines. Sound familiar?
Fast forward nearly 100 years and we have 90,000 pylons, 4,474 miles of overhead cables, 932 miles of underground cables and 342 substations. It’s a system that relies on predictability and people in control rooms stabilising the minute by minute peaks and troughs – toasters toasting at 7am, kettles boiling at halftime intervals and lights and heaters on during winter. For customers, it’s cheap, reliable and gives them ultimate flexibility.
But as the saying goes, there is no greater driver of change than necessity and over the last few years, and punctuated by COVID-19, our existing grid architecture experienced pressures on it that deviated so far from normal operating conditions, it’s spurred many people into asking, how can we start to rethink and re-engineer the grid? How can we use the original thinking of local, decentralised generation in order to meet the challenge of decarbonising the system, while at the same time keeping the benefits of resilience and ease of use?
Watt’s the big problem, anyway?
But as any consumer might rightly ask, what’s the problem exactly? My kettle still boils. My bills are relatively cheap. Electricity is a faceless commodity that comes into my house via a wire, makes my life very simple and I get an e-mail once a month telling me I owe £50. Why would you want to stick your oar into this gloriously harmonious system, Mr Ennis?
There lies a big part of the problem – few of us (other than those that work in the Industry) feel emotive about this subject. Our general understanding of networks is that they rarely go wrong – we do what we want, when we want. The level of prediction for base loads has become highly accurate but huge parallels can be drawn with the pre- and post-COVID worlds. One world ticked along at a nice steady pace with a high level of routine and then suddenly, by March, every sector and facet of life as we knew it had been turned on its head. The ‘new normal’ placed unforeseen stresses on the grid and these stresses don’t look like they’re going away.
We had to very quickly learn what the systems were capable of and, to give them their credit, the teams at National Grid have done an amazing job of deploying all the known mechanisms to avoid mass blackouts due to oversupply. A question we should be asking is how much complexity can we deal with, or indeed want? How do we adapt and augment the networks of today, to provide greater value to stakeholders and society in the future, and at what price? I believe the answers to these questions lie at the grid edge.
You too can join the edge
Now the grid edge isn’t where Lewis Hamilton might find himself if he has a bad qualifying session. And nor is it linked with living in a log cabin in the woods and renouncing all modern evils, like Wi-Fi and clothes!
The term is linked with the huge opportunity we have to digitalise, decarbonise and decentralise our energy system by concentrating on creating an electricity grid that is primed and ready to be cleaner, cheaper and more agile for the needs of the 21st century and beyond. The ‘edge’ gives the impression that this is a rogue idea, peeping over the fence into the main arena. This couldn’t be further from the truth and in the coming years, my view is that the rhetoric will shift, much as it has with the ‘new normal’ into just ‘normal’. This is a far bigger transformation of our system and soon it will become simply, the grid, or as I’ll show, a return to complementary series of grids, joined by a digitalised interconnected system.
People simply aren’t aware about the second by second calculations being made at a central level to balance this great supply and demand act. As the opening example shows, demand is down as we work through this pandemic, but on any given day, supply could be up because of renewable generation. On a hot, sunny and windy day we have an abundance of electricity coming into the system. Headlines like ‘California has too much power and needs another grid to share it’ are becoming far too common.
In the UK, we might not be blessed with an abundance of sun but what we have plenty of is wind. The government has committed to 40GW of offshore wind by 2030 up from the current 10GW. What’s more worrying is that National Grid will likely have to raise prices for consumers because of increased balancing costs. So, while demand may increase as we emerge from lockdown, engineers will still have to perform the balancing act as the feeds from renewables increases.
Things take a turn for the archaic in these instances and the System Operator will deploy a mechanism called ‘footroom’. This is where they will pay producers of power onto the grid to stop generating or ask consumers and large businesses to use more! In fact, on 20 April National Grid turned off 1.8GW of wind yet still had to rely on turbine-generated power to create the inertia in the system.
Our ability to transition to a low-carbon grid is being held-back by the very system that is supposed to deliver it.
Moving from the edge to the heart of the matter
We have realised the negative environmental impacts of a fossil-fuelled energy system. We are also realising the massive returns in the power afforded by solar and wind. Finally, we are witnessing a behavioural shift as local authorities begin to take ownership of their local-level challenges around CO2, NOx, congestion and energy efficiency and look to take back a degree of control to create healthier, cleaner and economically prosperous towns and cities.
Electrification is one of the strongest weapons we have in our arsenal to address climate change and carbon reduction. A move away from limited resources like gas and coal towards an unlimited supply of renewable energy is not even up for debate. However, our current grid architecture is not up to the task in hand. Why would it be? The grid’s original goal was to kick-start heavy industry back in the 1920s – to keep electricity at a healthy pressure as there were multiple power-hungry devices at the other end. As Britain changed industrially, so did our electrical demands. We moved from shipyards and factories to offices and laptops.
The grid edge therefore is used to describe a series of ‘solutions’ that exist between the end user and the grid either behind customer meters (local generation) or near to them. The solution is for distributed energy resources (DERS) that could give us new flexibility. These are solutions such as solar panels, wind turbines, ground/air source heat pumps, battery storage, smart meters, intelligent buildings and electric vehicles to name a few. All these solutions fall into the categories of either decentralisation or digitalisation. The point is that when you move electrons from one place to another, and when the point of generation is hundreds of miles away, you end up paying for that privilege as a consumer. 50% of your electricity bill is simply to pay for into its transmission from the point of generation to your house!
Distributed resources sitting on the grid edge can store energy, economise its use and provide greater intelligence to the distributor. As energy usage becomes nuanced across towns and cities, greater digitalisation of the system would give us the data and insight to be able to move, share and distribute according to micro-level fluctuations.
For decades the system has been run under the premise that supply must match demand. The System Operator does this on a second by second basis plotting the key loads coming at different parts of the day. So, if England get to the World Cup Final and we’re all glued to our TVs at 8pm, you can bet there’s a spike coming at halftime. At a national level, it’s about turning up the wick and increasing generation. However, a new way of dealing with these peaks and troughs is called demand side generation. So, if the game went to extra time and TVs stayed on, a number of other services could turn down their consumption for two hours, like a supermarket chain’s fridges or a factory’s lighting.
This balancing currently takes place on a massive scale by smaller aggregator companies, but at a district or city level, balancing would be more straightforward. Locally installed batteries and electric vehicles could handle peaks; empty office buildings could be turned off completely at a site by site level or local generation could be ramped up. And this can also extend right down to the sensors in our white goods, like washing machines and dishwashers. This real-time analysis of data could be fed into homes and managed via AI to run a washing machine at 8:30pm instead of 6:30pm, or for me to sell the surplus energy in my electric car to a local restaurant as I get home from work and they switch on their ovens, lights and heating.
Time-sensitive price signals to customers, or even their AI-powered appliances, can kill two birds with one stone, finding value for the customer and also stabilising the grid. But a large part of this transformation will rely on communication to the consumer. Too much perceived control will turn people off. Toggling every device in my house and being bombarded with live price data is not an attractive picture to paint, and while this would be far from the truth, the image we need to convey is one akin to the current system – one of ease and low involvement for the majority of usage decisions.
Ultimately, things are changing, and the current pandemic is shifting behaviours at an amazing rate. Even before COVID-19, we were witnessing local authorities and local enterprise partnerships tackling this challenge head on. Cities were enforcing clean air zones, building improvements, CO2-curbing mechanisms and local power generation. These are all being done in a bid to cut CO2 and increase the quality of life for people living there. Bringing control of their electricity grid into the fold is just the next step and something that could directly impact local energy pricing, job creation, green infrastructure and resilience.
As the rhetoric shifts from the ‘grid edge’ to simply the ‘grid’, the decarbonisation of our energy system will impact every aspect of our lives. It will transform a large, faceless commodity into something far more considered and see us take responsibility for our consumption. But it isn’t without massive complexity. Just 10 years ago, Britain had 80 individual points of generation to manage. Today, there are nearly 1 million.
But this is not an either-or debate. If we rewind to Victorian Britain and pre-grid times, local generation was horribly inefficient. Prices were high, supply was intermittent, and voltages varied from one street to the next. The National Grid eradicated all those problems but created new challenges in long-distance transmission and the real-time balancing of millions of homes by the very nature of central control. In 2020 I can see the new model emerging – a balance of highly efficient local generation, connected to, but not dependent on, the centre. What if Halifax Town Council was running a little lean on their local supplies and needed to import some from Leeds? What if Devon Council had a surplus of solar in August and needed to share that with other neighbouring towns? It could signal other interconnected systems, so balancing the Devon grid against the Cornwall one.
Interconnection is essential for any grid in the future and this is not about creating islands within our island. This is about creating an electricity grid that is truly fit for purpose in the Fourth Industrial Revolution. That’s the bedtime story I want to tell my children at night and that’s the journey I want us to start on.