Energy Transition

For a clean energy future, our relationship to the grid must change. Here's how

TAE Technologies has leveraged its scientific discoveries to develop power management tools such as these energy storage cabinets, which supply up to 750 MW for the company’s fusion energy experiments.

TAE Technologies has leveraged its scientific discoveries to develop power management tools such as these energy storage cabinets, which supply up to 750 MW for the company’s fusion energy experiments. Image: TAE Technologies.

Jim McNiel
Chief Marketing Officer, TAE Technologies, Inc.
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Energy Transition

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  • Outdated domestic power grids are currently unable to integrate necessary renewable energy sources.
  • As we transition to a carbon-free society we need to transform the way we power and manage the grid.
  • Future grids that capitalize on the potential of distributed energy resources can help flatten the demand curve.

Our current domestic power grids are woefully inept to integrate necessary renewable energy sources – plagued by ageing, outdated technology and a regulatory structure that hampers the ability to upgrade the critical infrastructure required. In the US alone, the power grid operates at about 40% efficiency.

The answer to solving this problem lies within a new approach to electricity: one that focuses on optimizing the way customers and their technologies interact with the grid. The devastating effects of climate change demand that we take our next steps without introducing more pollution and unsustainable demand on extracted resources.

As society develops a carbon-free economy, the power grid will need to undergo a significant transformation. A growing influx of renewable assets and energy storage will alter the resource mix on high-voltage bulk power systems, but that won’t greatly affect customers. It’s in the low-voltage distribution systems – the ones that deliver the power to our homes, businesses and factories – where we will see a rapid evolution that changes the way we interact with the grid. Let’s look at what’s happening, how it will affect us, and what we must do to ensure this energy transition occurs as smoothly and efficiently as possible.

Increasing asset utilization

Electricity prices are largely driven by two main costs: underlying fuel costs required to generate electricity, and the capital-intensive generation, transmission and distribution infrastructure that generates electricity and delivers it to customers. Recently, these costs have increased, largely because how we use power – our demand curve – has become “peakier”. We use greater quantities of power over relatively short durations, driven largely by increasing demand for air conditioning.

Significant demand levels may only occur once every few years when extreme heat arrives, but we don’t typically limit consumption through “brownouts” or other limitations. Instead, we build more infrastructure that is underutilized the remainder of the year. In fact, serving the top 1% of demand can result in up to 9% of total infrastructure costs, while the top 10% of demand accounts for about 25% of total costs. So, if we could “flatten the curve” by reducing peak demand, increasing consumption during other times of the year, or – better yet – do both, we could spread more energy over the same fixed costs, increasing capacity utilization and cutting infrastructure costs per delivered kilowatt-hour.

Distributed energy resources

We can flatten that curve with an emerging class of customer-sited assets known as Distributed Energy Resources (DERs). The Federal Energy Regulatory Commission describes DERs as assets that may include “electric storage, intermittent generation, distributed generation, demand response, energy efficiency, thermal storage, or electric vehicles and their charging equipment.” DERs are the inheritors to traditional Demand Response (DR) resources – on-premise devices that change behaviour in response to signals from utilities or power market operators. DR resources have greatly cut peak demand, but they are limited: they can stop using electricity, but they cannot send energy from the customer back to the grid.


How is the World Economic Forum facilitating the transition to clean energy?

In recent years that’s changed with rooftop solar installations now in the millions in Australia, California, and Germany. Solar panels were the first significant DER, but they could only deliver power when the sun was shining, and the output could not be regulated. However, the addition of on-site batteries quickly changed that dynamic, both absorbing and releasing power as needed. Battery populations are now growing quickly where rooftop solar dominates, storing surplus energy generated by millions of rooftop arrays, with hundreds of thousands of batteries in German and Australian homes, and large numbers in US states such as California and Hawaii.

The next significant DER to come will be electric vehicles (EVs), with batteries many times larger than household storage systems. EV sales have grown quickly, representing 13% of all passenger vehicles sold globally in Q4 of 2021. If charged during off-peak periods, they can increase overall grid utilization. In addition, many will soon have bi-directional capabilities, potentially sending energy back to the grid as needed. However, EVs can be a double-edged sword. If charged at inopportune times, they can exacerbate peak demand, putting more strain on the grid, and reducing capacity utilization.

The potential for a destabilized tower of babel

Our grids will soon host multiple DER technologies, often enrolled by third party companies known as “aggregators” that connect directly with the devices – outside the energy sphere, we’re familiar with third party aggregators like DoorDash or Postmates, which aggregate our restaurant orders to ensure food delivery. In energy, such aggregators can be very powerful, creating economic efficiencies or instability – especially at the local distribution circuit level where thousands of EV owners may reside – affecting critical issues such as voltage and frequency.

To illustrate the potential for chaos, let’s assume a situation in which a grid market operator calls for 100 megawatts of DERs on the distribution grid. If the system hasn’t been properly developed and coordinated, the distribution operator might not be aware of the situation, and the grid may not be physically capable of delivering the requested capacity. Thus, before the DER resource gets too big, it’s time to establish the rules of the road to enable safe and dependable implementation.

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A possible path forward

Enabling software and other technologies have only recently emerged, so there’s much to do to realize the potential of this future grid that capitalizes on the potential of DERs. Utility planning capabilities, regulatory structures, and business models are all in the very early stages. One critical requirement will be some type of central registry that classifies assets by type and significant characteristics, (e.g. the what, where, when, and the capacity and energy that can be offered). Each aggregator contract would tie it to specific assets, with that relationship documented in the registry. A permissioned-based approach, supported by appropriate grid architecture, would regulate both communications flows and hierarchy of behaviours (e.g. if a battery is contracted to support the grid, it must be available – it can’t have recently sold its energy for another purpose).

Our relationship to the grid – and how we power and manage it – must change. In the past, creating electricity has typically been an environmentally damaging endeavour – whether it’s extracting and burning coal, or harnessing the power of nuclear fission while creating radioactive waste. Powering our future also means developing sustainable, non-polluting energy that can withstand surges in demand and has more consistent availability than solar and wind power. Hydrogen-boron fusion energy is being developed at TAE Technologies to meet and exceed current demand, without burning coal or creating nuclear waste, with an anticipated date of 2030. The technology will be carbon-free and offer a new, vast supply of energy.

Who should be responsible?

Just as the internet is based upon a generally agreed upon set of premises, something similar may well be necessary for the power grid. To get this right, we must quickly determine who should sit in that supervisory registry role. This might be a non-governmental organization or a government agency, whose motives are not driven by a profit, and who can seek counsel from multiple parties that feed into the decision-making process. From today’s vantage point, we can clearly see the potential for a cleaner, more dynamic, and efficient power grid of tomorrow. However, there’s much to do before we get there. Who should be in charge?

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