Why the grid is broken:

If you want to connect a new solar farm to the grid, you currently have to wait up to 15 years in some places. The reason is that there isn't enough capacity in the grid. The grid is broken.

There are two powerful forces creating this problem:

Firstly, electricity generation is transitioning from stable generation like coal and nuclear, to very unstable generation like wind and solar. 

Secondly, electricity consumption is growing and is expected to triple over the next 20 years. This is driven by the uptake of electric vehicles, electric heating (heat pumps), data centers and increased air conditioning. Electricity consumption has been flat for the last 20 years and now its going to triple. 

These two forces combined create a perfect storm of instability that is overwhelming the grid. The wires aren’t thick enough and the generation isn't stable enough. 

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How to fix it:

One solution to this problem is to build 3 times as much electricity infrastructure as currently exists. This is very costly and inefficient. Another solution is to build a smart grid using storage and flexible energy consumption. 

At Elyos Energy, we focus on flexible energy consumption. 

There are three types of energy consumers; residential, commercial, and industrial. Industrial users have been using energy flexibility for 20-30 years. Residential buildings are catching up with EV chargers and the Demand Flexibility Service. Commercial buildings have been left behind. We are bringing energy flexibility to commercial buildings. 

Energy flexibility can be divided into two buckets, implicit and explicit flexibility

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Implicit flexibility:

Implicit flexibility relies on time-of-use tariffs. In July last year, Octopus Energy launched their ‘Shape Shifters’ commercial time-of-use tariff. This tariff charges businesses about double the price during the peak hours of 4-7pm. Using our software, businesses can shift their consumption to avoid these peak hours. 

This significantly reduces their energy bill. By shifting just 10% of their peak time consumption, businesses can save up to 15% on their energy bill. This also reduces their carbon emissions because the peak time is the most carbon-intensive time of day.  This is when the grid has to turn on the gas-fired ‘peakers’ to meet demand. 

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Explicit flexibility:

Occasionally there are unexpected surges in demand on the grid. When this happens the national grid pays companies to reduce their consumption for short periods of time. Commercial buildings have significant flexible capability. For example a building can turn its water boiler off for 1 hour and have almost no impact on the comfort of the people in the building. By doing this at the right time, businesses can get paid significant amounts of money from the grid. 

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Conclusion:

We are just at the start of the smart grid revolution. As more unstable generation comes online, and as demand increases, flexible consumption will become critical to enabling the energy transition.

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