21st century energy system - inenco€¦ · century asset class and inputs ¥ new runners and...
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21st CenturyEnergySystem
ImperialCollege|EnergySystemsCatapult|ChallengingIdeas
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3CoreProblems
• StructuralCapture:§ Oldfashionedthinking,incumbencycapture,fearofthe
unknown§ Regulationinstitutionalisingoldfashionedsolutions§ Costingthewrongthings
• ConsumerBy-Pass:§ GovernmentiscapturedbySupplyratherthandemand§ Incumbentsdon’ttrustconsumerstomakegooddecisions§ Consumersvictimsofthe“system”
• RegulatoryandBusinessModelAtrophy§ Bigisbest,challengersarefullofrisk§ Newbusinessmodelsarequestionedpolitically§ Regulatorychangeincrementalandindustrycodechange
glacial§ Sellotapesolutionsaddingcostandcomplexity
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SYSTEMDESIGN:GridrunningaBentley24/7- 365.Howmuchis“security”costing,isitefficientorarewecapturedbyanincumbentmodel?
SYSTEMICWASTE:ThePowerSystemisonly46%productive.Otherindustriesdeliver4%paproductivitygains.Whynopressureonefficiencyforthesystem?
SUPPLYMODELSLESSEFFICIENTTHANDEMANDMODELS:NotransparencyofREALcost,billedinalanguagenooneunderstands,norelationtousagewithfewoptionstocontrol.
Wasteful,Inefficient&Stupid…ParticularlyEnergy…
SMARTMETERSLEAVINGCONSUMERSCOLD:Canbestupid&UGLYtoo...
CCSOVERENGINEERED&UNDERDESIGNED:Anengineer'sdreamandnotasensiblesolutionforapotentiallyvaluableproduct.
WASTEDWASTE:£2.5bn“Valuable”materialssenttolandfill,wastingassetsandresources.
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NEWBUSINESSMODELS:Newservicesonthemarketquestioningsomeofthe“energy”systemsassumptions.Ownershipversusservice
CONSUMERSARESMART:Consumerscanmakeverycomplexdecisionsifgiven“good”information– noneedtobepatronisedbysimplicity
DATAREVOLUTIONS:Bigdata,newanalytics,bigthinkingmigratingtomicrobusinessmodels
OPENUPACCESS:Distributedenergy,localisednetworks,andconsumerparticipationinDemandSideResponseopensupmarkettoactiveconsumersdrivingdowncostanddemandandbuildingaPlugandPlaycapability…
NewThinkingandNewPlayers
CARBONCAPTURE&UTILISATION:Re-engineeringCO2intoproductiveandusefulproduct!
DEMANDSIDERESPONSE:Shoulddeliversignificantsavingstothewholesystembutunderdeveloped!
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BLOCKCHAIN:Buildingnewcontractualrelationshipsguaranteeingsystemoptimisation
COLDECONOMY:Refrigerationandairconditioningisoneofthefastestgrowthsectors– currently7-10%- growingby33-fold- canwedoColdSmarter?
NewThinkingandNewPlayers
STORAGE:THEUBEROFENERGY:Optimisationoftheutilityofeveryunitofenergy,democratisedandconsumerproductsdesignedasstores&distributors
INDUSTRIALSYMBIOSIS/CIRCULARITYNewthinkingandWasteBustingthroughoutindustrialprocesses.
ANEUTRONICPOWER– POSSIBLE?:Tri-AlphaEnergystatingtheyareonly10yearsfromwastefreefusionpower!
DC-GRIDS:LossessignificantthroughAC/DCconversionthatassistsGRIDSnotconsumers– systemdesignaroundproductivityattheplugnotthepowerstation
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BulkTransportToRegionalWarehouses80%ofelectricitytravelling
through
Abattoirinspections
TheFarm TheMarket
RegionalWarehouse
LargeCustomers– B2B
Restaurants– B2SME
B2C
Supermarkets
LongTermContracts
WhiteVans
RoyalMail
81%ofelectricityproducedby8
majorgenerators
86%ofelectricitybought
through6companies
2010
SingleDirectionSupplyChain
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Data
Enablers:• Smartmeters
• Data
• DistributedGeneration
• Storage
• MicroGrids
• CommunityEnergyandpeer-to-peer
• ElectricVehicles
• Smartappliances
• Marketandregulatoryreform
• Demandflexibility
IoT
Electricheat
P2P
Bigbattery
Personaldata
Systemby2030
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TheCurrentRegulatoryModel
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ConflictingInterestsattheHeartoftheSystem¥ CompetingDirections:ThePushoftheExistingSystemv.thePullof
DemandTechnologies
¥ DominantArchitecture:CentralisedDespatchvDistributedProsumers–andBoth
¥ OldFashionedCostBase:Wearecostingoursystemaccordingto20th
centuryassetclassandinputs
¥ NewRunnersandRiders:Newdominantplayers– isitreallygoingtoUtilities– ordatacompanies,Alexa,appliancesuppliersorEVCars
¥ SmartorjustlessStupid:SmartbeinglaidontopofStupidvsmartdeterminingshapeofthesystem
¥ NotinIsolationoftheIndustrialNeeds:SmartjustintermsofenergydeliveryorsmartforUKcompetitiveness,energycostsandproductivity
¥ GlobalLeadership:UKneedstoownthefutureofregulationandmaintainsleadershipindesignandshapeofcompetitiveenergymarkets
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FromthePlugthroughtothePowerStation
◎ AreweincentivisingtheWrongThing?Wearecurrentlyincentivisinggenerationratherthanutilisedenergy◎ DistributedSystemsOperation:Withnewconsumergoods,domesticstorage,digitallycontrolledappliances
willbalancingbeinthehome/factoryratherthanwiththeSO◎ Productivitygains&SystemsOptimisation:With46%powerproductivityweshouldbegettingmorefrom
oursystem- OfwatModelandwhatdoesdistributedgenerationdotooptimisation◎ TechnologicalEvolution:Arewedesigningthesystemaround“transition”challengesratherthanthefuture◎ ResilienceandSecurity:Securityhasbeenbasedaroundcentralisedsupplymodel.Howdoesademand
drivensystemwithdistributedgenerationimpactsecurityofsupplyandresilience.
◎ Simplification:Whyaresomanynewentrantseitherputoffbythesystemormorphintobusinessesthattheydidnotwanttobecome.
◎ OldFashionedAssetClassification:Is“one-sizefitsall”assetclassificationcostingmorethandevelopingdifferentassetclasses&optimisingmoreappropriatefundingmodels
◎ AreWeChargingfortheWrongThing?:Withthemarginalcostofenergyarewechargingforthewrongelementoftheenergysystem?Optimisationanddispatchpossiblywherethevaluereallylies
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IoTProSumer
Automatedsupply
GoldService
SilverService
Bronzeservice
Vanilla
FreeEnergyBundled
FreeEnergywithEVcar
Personaldata
Data
NewProductsandServices
FoodAnalogyThefoodsystemchangedwhenhomeshadrefrigeration– storage.Withaproliferationoffoodproductsandsupermarketshavetostockjustintimebasedonbigdataandinventorytechnology.Supermarketsdonotasktheconsumertomanagethesupply– butstillrespondtoconsumerdemandCostof“outofseason”orimportedproductsincreases– peak/intermittency.Howisthequalityandsafetyoffoodregulatedacrossbigandsmallretailersincludingrestaurants&masscaterersSomebuyingredientstocook,othersbuyeasymeals
EnergyConsumers
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Data
MultipleServiceRequirements
LocalEnergyMarket
FoodAnalogyThefoodsystemchangedwhenhomehadrefrigeration– storage.Withaproliferationoffoodproductsandsupermarketshavetostockjustintimebasedonbigdataandinventorytechnology.Supermarketsdonotasktheconsumertomanagethesupply– butstillrespondtoconsumerdemandCostof“outofseason”orimportedproductsincreases– peak.Howisthequalityandsafetyoffoodregulatedacrossbigandsmallretailersincludingrestaurants&masscaterersSomebuyingredientstocookothersbuyeasymeals
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Bigbattery ElectricHeat
Call in the Cavalry! FoodAnalogyThefoodsystemis5meals
awayfromstarvationandthatcanbeacceleratedbyanyfood
scare.Whataretheemergencyresponsestohorsemeat,supplycrisis,supplier
bankruptcies.Howresilientisthesystem?
Andhowmucharewepreparedtopayforsecurityof
supply?
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TheUKhasthemostexcitingopportunitytoshapeatrulymodernenergysystem– withambition,technology,productivityandnewthinking
AncientorModern?
Willourregulationandsystemdesignholditback?