For many of us, powering a lightbulb with a potato was our first encounter with the idea of self-generated electricity.
Some wire, copper, zinc and a potato was all that was needed to illuminate an LED bulb, with the potato’s sugar, water and acid reacting with the metals to create an electrical current.
From an early age we are presented with the idea that electricity can be generated from renewable sources, yet outside of the classroom in the ‘real world’ our energy markets are focussed on fossil fuels.
We’ve lived this way for more than a century which impacts the quality of the air we breathe and has been the driver to change energy sources in highly populated cities.
In part as a result of the detrimental environmental impact, this has fueled the preconception that in order to be greener we need to be conservative; turn off the lights and use appliances sparingly.
But I think it’s time we stop demonizing the air-conditioner and take a leaf out of our science school books.
Because ‘energy’ itself isn’t bad – it’s simply the sources we’ve traditionally used to produce electricity that can be harmful. In fact it is energy that powers our economies and raises our standards of living.
Making The Right Connections
Ever since Thomas Edison’s lightbulb invention began to power civilisation in the 1800s, fossil fuels have been the main source of electricity supply.
The process is relatively straightforward; we burn fossil fuels, like coal and gas, to drive large steam turbines that produce electricity. This is then passed through transmission and distribution infrastructure, ie through power lines until it eventually meets your home or business.
In Australia, the National Electricity Market (NEM) is one of the largest interconnected electricity systems in the world, with more than 24,000 miles of transmission lines and cables supplying about nine million customers.
But is this really effective?
This was one of the questions I asked myself as a research fellow at Curtin University, exploring what role innovation, energy and blockchain technology could play in creating sustainable cities.
And, it was this thinking that led me down the rabbit hole of creating energy efficiencies and a fortuitous meeting with venture capitalist Bill Tai.
I first met Bill at West Tech Fest in 2016, a local event organized by Curtin that showcases the Perth tech community to the global stage. I took my chance to talk to Bill about an idea we’d had to democratize energy.
The next time I saw Bill was at Sir Richard Branson’s Necker Island in 2017, during the annual Blockchain Summit, which I’d been invited to speak and give a presentation at, on how blockchain technology was being applied to distributed energy market places.
Many Hands Make Light Work
Governments, industry bodies and businesses alike are quickly realising the power of coming together to enact change.
New Zealand has just passed a law aiming to support the country in its ambitions to reach net zero carbon emissions by 2050. The Zero Carbon Bill provides a framework that will help New Zealand prepare for and adapt to the effects of climate change.
In October, the Malaysian government’s Sustainable Energy Development Authority made its first foray into peer-to-peer energy trading, launching a pilot trial enabling consumers to sell excess solar energy to Tenaga Nasional Berhad customers.
And just two weeks ago Australian Prime Minister Scott Morrison allocated an extra A$1 billion in funding to the Clean Energy Finance Corporation to support the development to future-proof the electricity grid and drive down prices.
This year, Bill visited our Perth headquarters and posed a very interesting question: If everyone in this room were given 24 hours to decide to let something from the sky cut off either oil or electricity from your life, what would you choose?
“I’m sure it would be a unanimous vote,” Bill told our team.
“We’re moving very rapidly from an economy that is dependent on oil to one that is dependent on electricity.” he said.
So much energy is wasted through transportation of the electricity or is more expensive that it needs to be, because of the high cost of transportation – and in a place like Australia, where regional towns are spread far apart, the further you transport energy down transmission lines, the more energy it takes to deliver it and the more it costs.
And what about those peak periods putting even more pressure on this stretch of transmission lines.
“There’s almost nothing bigger than the electricity market.”
If there was more widespread peak and dynamic pricing for networks, and more competition in peaking markets, perhaps from consumers with batteries, our energy grid would evolve organically in a sustainable way.
Parts of the grid that didn’t make economic sense to maintain could then become microgrids powered by solar storage and backup power systems if required. They would also be more resilient to wildfires.
Networks in other sectors have innovated in this area, such as airlines, telcos and railways. Network optimization using market mechanisms, can achieve greater utilization of networks and return on investment.
Even without dynamic network pricing, consumers delivering energy into peaking markets will change things for the better.
“Everyone is trying to figure out how to generate electricity more efficiently. So, if you provide fundamental value to your customers you will always be able to charge them and then if you can do it at scale, you will have a really big company,” Bill said.
And Bill is right. We all have the ability to proliferate self-generated and self-sustaining electricity.
Change at this scale starts with having the right tools.
If You Had To Give Up Oil Or Electricity, What Would You Choose?
The idea that you create competition simply by having lots of energy retailers doesn’t work if there isn’t competition when demand for electricity is at its peak.
Consumers can be part of this competition story too, and it’s starting to happen thanks to advancements in technology.
During peak electricity demand periods, a household with rooftop solar panels and battery storage could pool its excess self-generated energy to the grid.
Energy markets need to keep pace to deliver competition, and integrating new technologies can help – and it’s what’s holding us back to deliver clean, reliable and low cost electricity.
I don’t know about you, but I’d happily give up my petrol car for a hot shower, refrigerator and Netflix any day.
The father of lightbulbs Thomas Edison himself once said, “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.”
So what are we waiting for? While renewable energy has gained some momentum as of late, more needs to be done to start seriously rethinking the traditional mechanisms that have governed electricity markets.
And all it takes is just one lightbulb moment to change the entire energy market.
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