Energy Storage

Wipe the Slate Clean

Some of the possibilities we pondered about 20 some years ago are taking shape today, forcing people and industries grounded in convention to shed pre-conceived notions about commerce, technology and consumer services.

The best part of reporting and writing about science and technology is pondering the possibilities.

Some of the possibilities we pondered about 20 some years ago are taking shape today, forcing people and industries grounded in convention to shed pre-conceived notions about commerce, technology and consumer services. For the power sector, an industry known for its dispositional resistance to change, breaking free from century-old concepts has been vexing. Those conventional concepts are being dismantled by demands driven by technological advances inside and outside the power sector.

Blockchain technology, for example, promises to remove the traditional utility from electricity transactions and could accelerate the decentralization of an industry that is already shifting to distributed energy resources. Imagine a world where every household or business that generates and stores electricity can enter into automated, peer-to-peer transactions with neighbors or sell power back into the grid at the market rate, rather than through a third-party utility.

I remember when utility executives scoffed at the idea of storing utility-scale power supplies in batteries. That was just 16 years ago. Last year, battery energy storage systems accounted for 1 GW of installed capacity worldwide. By most accounts, energy storage will be fundamental in supporting a grid congested with variable power supplies.

Imagine a day when it will be next to impossible for a nuclear power plant to meltdown. That day will be here in a few short years thanks to progress being made in the design and development of small modular rectors (SMR). In fact, the SMR market is expected to grow to around $1 trillion by 2035. Some contend SMR technology is the key to returning the nuclear industry from the edge of economic collapse. 

Another major element in the power sector’s transformation centers around America’s century-old business model for electric utilities. The regulatory model that has long been used by utilities to generate a return on their investments in centralized power is losing its relevance in a world with a preference for cheaper distributed generation. In 2013, David Crane, former chief executive officer of NRG Energy, described the shift to distributed power as a “mortal threat” to utilities.  “They can’t cut costs, so they will try to distribute costs over fewer and fewer customers,” Crane said at the time. As a result, he said, electric bills will rise, which will drive more customers to invest in distributed generation at their homes and businesses. Five years later, it appears Crane’s vision and strategy may have been spot on.

This is the future power producers should be preparing for. The industry is rewriting the rules for producing and delivering power and maintaining, operating and managing power generation assets.

The heart of this transformation can be found in the digital realm of the Information and Communication Technology (ICT) sector, which promotes the unification of communications technology and the integration of telecommunications, computers, software, storage and audio-visual systems to enable users to access, store, transmit and manipulate information. Innovations based on digital ICT include artificial intelligence, augmented reality, blockchain, instant messaging, video-conferencing and robotics.

So what does the convergence of digital solutions, power generation equipment and advances in automation mean for you, the power professional with years of training in longstanding processes and procedures in power generation?

It will require a clear mindset, an ability to clear the board and see things for the first time. It’s important because the power sector is being reinvented to accommodate a renewable and digital revolution that has spawned new expectations from consumers.

At the turn of the century, more than half of the nation’s power was produced with coal and the prospects of renewable power and energy storage playing a starring role in U.S. power generation were quickly dismissed. The technologies were too expensive, unproven and difficult to integrate into a grid built around coal. Today, renewable power and energy storage are two of the biggest emerging markets in power generation.

In 2017, renewable generation in the U.S. increased more than 13 percent versus 2016, with generation from solar growing more than 47 percent and wind more than 12 percent. The cost of energy storage has plunged in the last three years and some are predicting the global energy storage market will double six times between 2016 and 2030, mimicking the historic solar expansion between 2000 and 2015.

Power generation will be done in completely new ways in a few short years. What the future of power generation will look like is still unclear, but I’m looking forward to the journey.

POWER-GEN International 2018

Next-Gen technologies in power generation will be discussed in great detail during several conference sessions at POWER-GEN International 2018 Dec. 4-6 in Orlando, Florida. To join us in Orlando, click here.