What’s driving change in the energy sector? How will it influence smart cities of tomorrow?
Everything we know about energy is about to change. Not long ago, if the big utilities needed more power, they didn’t think about it much. They built another power plant. They looked out 30 years on the horizon and planned for their energy needs, according to demand forecasts tied to economic growth. This core belief was so entrenched energy consumption was considered a metric for gross domestic product. But not anymore.
Today, the power industry sits at an inflection point. From how power is produced for us, to how it’s sold to us, to how and where its consumed by us, everything about the energy industry is changing. We will experience more change in energy generation and distribution in the next 10 years than we’ve seen in the previous 100.
Evolv1 Centre for Sustainability Excellence in Waterloo, Ontario.
An unsustainable model
The whole electrical grid came into being as a means of lighting cities. As it grew and evolved, the grid moved from a somewhat distributed generation system to a centralized system with massive generators and an extensive transmission network. Electric utilities were founded on the premise that population and demand would grow.
Today, we understand these systems are unsustainable and potentially unnecessary. Energy demand continues to be driven down by new, more efficient technology, improved building design and construction methodologies, and insulation. Consider those changes alongside a slowing population growth, an economic shift toward a digital and service-based economy combined with the offshoring of manufacturing and heavy industry, and it becomes clear that the traditional variables for energy planning are no longer valid.
In response, many energy utilities are pivoting to new roles, roles that extend beyond selling electrons. Many are recognizing the need to become energy service and solutions providers, renting equipment, managing demand, diversifying into emerging energy segments like digital power solutions or electric vehicles.
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Society change, information, control, and smart cities
Societal perceptions about energy are changing. Consumers are more vested in energy generation and consumption than ever before. There is an unprecedented demand from consumers for information about and control of their energy options.
The market is responding by developing new tools and technologies including customized power options that give consumers more control, resilient microgrids capable of securing community energy supply, self-generation options where they can generate their own power and feed it to the grid, and peer-to-peer energy sales. And there’s a steadily escalating interest in electric power origination. Consumers clearly want to implement renewables
There’s a big push from corporate and residential consumers alike to be good stewards of the earth and make greener choices. The rise of energy-savvy consumers across the globe is a strong driver of the energy market’s revolution.
Installation of 711.37kW rooftop photovoltaic system for Anheuser-Busch.
Magic inflection point and mindset
But who is going to pay for all this innovation? As always, investing in innovative technologies and approaches has a price point. Recently, we’ve hit that magic inflection point—where there is a price impact that people are willing to invest in, to a degree. In some markets, there’s a higher tolerance for the cost of implementing more energy-efficient infrastructure and technology than there was in the past.
_q_tweetable:We will experience more change in energy generation and distribution in the next 10 years than we’ve seen in the previous 100._q_
So, what’s changed?
The market. Regulations. Corporate commitment to renewables. Really, awareness. Consumer desire drives down price. In many markets—particularly coastal areas—clients, municipalities, and consumers want products and systems that are resilient, they want green power, they want something that looks to the future.
In areas that are still dependent on heavy industry, this market may be softer. While today, 1 firm in 20 may embrace investment in efficient technology, soon it will be 5, then 10. One day, in the not-to-distant future, the market will bloom.
Cross-disciplinary nature of energy innovation
Over the past century, cities and towns were designed and built on a conventional centralized energy distribution model that was mono-directional. Disruption in energy is already influencing the way we plan and build cities. Energy harvesting, usage, and community resources are increasingly intermixed in a bi-directional manner. As the lines between traditional power infrastructure continue to blur with other traditional markets, adapting to this disruption in energy is pushing energy into a more interdisciplinary engagement, requiring the integration of power, buildings, infrastructure, and water engineers and designers to collaborate more closely than ever before.
We already see the beginnings of change in energy approaches at the community level, with everything from community car parks with solar canopies and car-share programs to distributed community energy generation. And we’ll see communities implementing existing technologies from microgrids to energy districts to technology that recaptures energy from braking commuter trains. We may find that self-sustaining microcommunities are one answer to the commuter challenge. Eventually, we’ll see communities transform and adopt in ways we can and can’t predict.
The energy revolution is just beginning.
Crescent Dunes Solar Energy Facility (Photo: SolarReserve, LLC)
6 technologies and trends in energy disruption
Here are three trends that are growing up.
1. Microgrids: Energy security and independence: A microgrid is a local energy grid that typically operates independently on locally generated energy as needed. Microgrids provide added resilience and security, as they continue to function if there is an outage in the overall grid. A major feature of microgrids is the variability of their composition. They can incorporate energy storage, diverse generation sources, and custom distribution models.
2. Energy districts: Saving money with load sharing: Office complexes have high cooling loads. Hospitals and factories generate excess heat. Can that excess heat be recovered and used elsewhere? Perhaps to heat residences at night? In the conventional model, each building needs heating and cooling to meet peak demand. But if we can transfer excess heat from one building to another, we can realize efficiencies. Depending on use, each building has a somewhat different load pattern. By moving energy between buildings based on demand and time-of-day needs means we can design smaller mechanical units, which means lower capital and operating costs. University districts and corporate campuses, with their shared facilities, power and metering, are excellent candidates to form energy districts.
3. Energy storage: Save it when you’re not using it: Local power generation and load-sharing, whether it be solar photovoltaics, off-peak gas, or recovered energy will depend on improvements in energy-storage technology. As local energy markets continue to diversify, so do energy-storage options. In fact, they are one of the fastest growing segments within the energy market, as equipment manufacturers, utilities, and service providers all seek to meet the market’s growing demand for the increased energy independence and resilience.
Here are three trends to watch.
1. Energy productivity: Seeing energy as dollars: Energy analysis findings are often explained in industry jargon and metrics (EUI, pEUI) that do little to excite the business world. And the choice between energy efficiency and revenue growth has long been presented as a binary one. But what if we frame energy efficiency in the same terms that company CFOs and CEOs are familiar with? Energy productivity translates the metrics of energy consumption into business productivity terms that are more tangible to CFOs. Energy productivity quantifies a company’s economic output for every unit of energy consumed. It decouples efficiency from profit by showing an energy-footprint reduction can accompany revenue growth—that efficiency is potentially a money saver. Thinking this way moves energy efficiency away from a space-related, fixed-cost issue into the realm of strategic investment.
2. Grid-responsive smart thermostats: Reducing the load at home, remotely: Smart home owners already pay themselves off in energy saved. But grid operators and start-ups would love to connect with these homes (outfitted with smart plugs, smart thermostats, etc.) and aggregate that home-load flexibility to take pressure off the grid. Homeowners who sign up turn over large chunks of energy use to remote control. Pilot programs are already underway in California, paying superusers in cash.
3. Energy as a subscription: Making system upgrades a priority: People don’t want a boiler and chiller, they just want to be warm in winter and cool in summer. We buy electricity from the grid but are not required to personally buy and own the poles and wires connecting us back to the power plant, why must we own our own HVAC systems? In the subscription model, we pay for the power, not the equipment.
About the authors
Bill Shelley works from our Scarborough, Maine, office and has decades of power sector business experience. He works on project development and every phase of power asset lifecycle management.
Rachel Bannon-Godfrey has deep experience in the design, construction, and analysis of high-performance and net-zero energy buildings, along with energy efficient and renewable energy technologies. Based in Denver, Colorado, she is Stantec’s sustainability discipline leader.
Mark Wilson is sub-sector lead for Canada East’s thermal generation team and sector lead for Atlantic Canada’s Power business center, working with electrical utility and industrial clients from Fredericton, New Brunswick.