'Death by a Thousand Cuts' was the brutal appraisal of the power generation goliaths by Jeffrey Eckel of Hannon Armstrong, the leading energy investment house, at the Barclays Future Energy Conference December 2016 in London. The Euro 1 billion/GW big-is-beautiful model for electricity utilities is being inexorably destroyed by such things as the humble LED needing almost no electricity and the energy independent electric vehicle needing no electricity at all. Local micro-generation, much of it off-grid, becomes more and more viable. See the IDTechEx report, Energy Independent Electric Vehicles Land, Water, Air 2017-2037.
Losers and winners
Oil and coal are now rapidly losers and the future is wind and solar with solar costs dropping faster than predicted by the industry. In addition, electric vehicles could erode as much as 10% of global gasoline demand by 2035, according to the oil industry consultant Wood Mackenzie Ltd.
Innogy sees electricity suppliers transitioning from spending more to get more over to simply spending the same to get more in a new golden age. In one example, wind power leader Vestas said cost parity of wind with gas can be expected not long after 2030 heralding the beginning of the end of gas as an interim solution. Vestas sees 3D printing as its key enabling technology for wind turbines and replacement parts in future. See the IDTechEx reports on this rapidly emerging technology. Expect taller towers and longer blades. Decommissioning "a lot of concrete and steel" in old sea towers may be an unbudgeted cost and IDTechEx notes that Airborne Wind Energy (AWE) at one tenth of the cost and accessing the more consistent and stronger wind at 300-1000 meters looks promising as an alternative one day. See the IDTechEx overview report, Energy Harvesting: Off-Grid Microwatt to Megawatt 2017-2027.
Sidelining marine sources for now
Wave and tidal generation were not considered important because of cost. However, IDTechEx believes that that could eventually change with the new forms that do not involve parts rubbing together, notably dielectric elastomer generators, magnetostriction and the subject of the IDTechEx report, Triboelectric Energy Harvesting (TENG) 2017-2027.
Gas is a bridge
Most of those in the electricity supply industry cite gas as a vital transitional generation fuel with thermogas and biogas growing. 90% of global trade is carried by sea and about one third of the oil and gas extracted worldwide comes from offshore sources. Both are enabled by large dedicated service fleets of varied vessel types that produce significant GHG emissions. Franco Gonzalez, head of EV and energy storage research at IDTechEx notes, "However, even here help is at hand. For example, the Corvus "Energy Orca" energy storage system from Canada brings Zero Emission Energy solutions to the maritime market. The Corvus team is working with industry leaders to help accelerate the adoption of solutions that use energy storage to reduce vessel carbon emissions worldwide". See his new IDTechEx report, Electric Boats and Ships 2017-2027.
Nuclear is a constant supply backbone with France having too much and the UK having too little as replacement capacity is belatedly supplied. Nevertheless, at the event, speakers saw little place for nuclear in future due to high cost and wind and solar unstoppable despite Donald Trump, this being due to low cost. ABB saw microgrids and increasingly global smart grids co-existing but IDTechEx advised that utilities need to reduce their projections of EVs as their only big opportunity for increased output to 2040: they need to deduct energy independent electric vehicles (EIVs). Utilities see EVs as usefully taking off-peak demand: 1TWhr/yr of renewable energy is currently wasted due to its timing and, outrageously, that wastage is increasing. Most EC electricity demand currently comes from motors and lighting we were told. Ironically, geothermal heat pumps - with maybe 12 million in the UK one day - constitute a significant new electricity demand they said. IDTechEx is not so sure.
Electric vehicles to the rescue
IDTechEx expects EVs to create significant electricity demand in about ten years and be key to huge improvements in local noise and air pollution and in global warming reduction. See the IDTechEx overview, Electric Vehicles Change the World 2017-2037 which has number and value forecasts in 47 categories land, water and air, off road and on-road, on water and underwater. It is all one business now, with companies increasingly making parts and even vehicles for more and more sectors. It could be a trillion dollar business in about ten years and industrial and commercial vehicles are the majority by value and will remain so. See the IDTechEx report, Industrial and Commercial Electric Vehicles on Land 2017-2027. Energy harvesting and regeneration in many new forms are becoming key enabling technologies for EVs as scoped in the IDTechEx report, Electric Vehicle Energy Harvesting/ Regeneration 2017-2037.
Fuel cells and hydrogen
Fuel cell companies present said that green electricity at the wrong time of day could be used in electrolysis to create hydrogen, which they claim is a better storage medium than batteries as it goes straight into the gas grid to decarbonise gas and it gets used in fuel cells. However, fuel cell vehicle deployment is slow. We heard that fuel cell car price is targeted to halve to £28K one day. London has just ordered one hydrogen double decker bus we were told. Gesture politics? Perhaps more promising were Ceres low cost steel fuel cells targeted at data centres, CHP and commercial stationary applications.
Utilities 'changing rapidly'
Those from utilities at the meeting argued that they have been in denial but are now changing rapidly, for example to smart grid with new tolerant power electronics, renewables and investment in promising start-ups. "Predict and provide" has been replaced by "observe, create options, invest". The greatest need cited by those start-ups was said to be introductions to the right people to get sales: it was not investment.
Batteries one day
Batteries can balance the inappropriate timing of green supply that but most speakers seemed to judge this to be uneconomic in most cases as yet. All the same, energy storage will eventually add value to PV and wind packages because they will be time coordinated to loads. Electrovaya promoted its "non-toxic, safe" lithium-ion battery based on a proprietary ceramic separator saying its higher price is justified where intensive use exploits the excellent cycle life (not in cars) and safety. It has bought the Evonic Daimler gigafactory in Germany. See the IDTechEx battery reports such as, Lithium-ion Batteries 2016-2026 and Advanced and Post Lithium-ion Batteries 2016-2026: Technologies, Markets, Forecasts. Many companies such as Electrovaya, XALT and BYD have battery gigafactories, mostly under-utilised, yet Tesla belatedly building one for Panasonic to make batteries in is seen as pioneering. At the event the microgrid house with battery and solar was referred to as "the Elon Musk option" although Tesla is a follower into that as well! Of course, Tesla will seek to leapfrog in many respects but so will everyone else. It is its superb marketing that gives it an advantage.
Ameresco saw rapid growth in microgrids based on batteries. Indeed, microgrids were repeatedly praised. The big casinos in Las Vegas have paid millions of dollars to utilities to escape electricity supply contracts and make their own electricity. 88% of companies cite future electricity costs as a major fear, so making your own creates more certainty: it does not just remove an intermediary's profit point. The EC expects a 24% increase in electricity prices by 2035, "the highest increase in the world". It will not be just Las Vegas that decouples from that nonsense.
Africa has 50% of its population - over 600M people - denied electricity and just as they are leapfrogging phone line to adopt mobiles, they are leapfrogging large power stations to adopt microgrids. However, they all aspire to grid connection and maybe they need to be persuaded otherwise. This is not technology policy as in China but the sheer impracticality of draping phone and electricity lines across a continent and keeping them functioning.
Power electronics key
Power electronics is becoming key in power distribution because it is increasingly used instead of clunky source switching and waste for coping with the different supply characteristics of renewables into grids. Solar Edge said they have sold 576K inverters and 14.1 million power optimisers for renewables even before that new power electronics kicks in. Eliminating shading and power mismatch and early identification of failed panels can increase solar array output by up to 25% they reported. This echoes it becoming more important in EVs.
Improvements, carbon capture
Fastest cost reduction is being seen in solar and particularly in offshore wind which starts from a high cost. Carbon capture is a hot topic but any success seems unlikely to save coal, in the view of industry insiders.