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Powering ahead

The UK's energy system is no longer fit for purpose. Drastic changes are required if electricity nee

This article first appeared in the New Statesman supplement 'Smartening up: Powering the UK's future energy needs through innovation andtechnology', sponsored by IBM.

The UK energy system is facing a crisis. This is a slow burn crisis, with time for us to act and avoid its worst consequences. Paradoxically, having time to make changes works against as well as for us.

Building the new generation, transmission and distribution assets that we need is a mammoth task, and one that will take years, if not decades, to complete. Changing the ingrained behaviours of an entire country, across multiple generations and cultural backgrounds, will be no quick and easy task. The regulator is getting to grips with the structural changes needed and the utilities are beginning to alter their business processes and refresh the underlying technologies as a result. With all the consequent risks and complexities, the transformation programmes to effect these changes are multi-year efforts. No one involved is arguing for less time.

However, the very fact we appear to have time on our side presents a real and serious danger, one that we at IBM believe is receiving insufficient attention and urgency. The development of a smart energy system, both the smart grid and a smart energy market, is crucial. A smart grid is one in which IT and analytics are used to maintain the integrity of the system, protect individual parts from damage and change the flows and usage of energy. A smart energy system uses prices and commercial agreements to shift both demand and supply behaviours to the benefit of all participants.

At IBM, we believe this will not result from the current piecemeal developments of new technology nor from the market reforms so far under discussion. The experiments being encouraged by Ofgem under the Low Carbon Networks Fund are well intentioned and will provide useful outcomes, but their time line means they will bear fruit too late. On the current trajectory, we will be faced with trying to knit together disparate and potentially incompatible developments rather than putting in place first the framework within which component level innovation can be left to the market.

Our energy system is not a collection of discrete components, each of which must do its own job: turbines to generate power from wind; high-voltage wires to transmit power; meters to measure and report usage; and transformers, power stations, electric vehicles and more besides, each with its own specific purpose. It is a system of systems in which the operation of each part must be connected, integrated and balanced, and which must inter-operate with others: transportation, water and sewerage, city infrastructures, buildings, hospitals and more.
We do not simply require each part of the rebuilt system to operate a little bit better, cheaper and cleaner, though this is a part of the challenge. Neither will it be enough to have the system as a whole work a little more efficiently but in the same way as it does today.
In order to replace as much as a third of our total generating capacity by midway through the next decade, cut emissions by 80 per cent by 2050, scale UK renewable energy to 30 per cent of the total used by 2020 and avoid a doubling or more of energy costs, we will need the energy system to work in a different, smarter way.

Maintaining the equilibrium

Generation is becoming far more distributed, driven largely by the increase in wind farms and the generation from domestic sources such as solar PV. This requires our distribution and transmission system to handle flows of power that are very different from those for which the existing hub-and-spoke topology of the grid was designed. This is not to say that our current system is dumb, far from it, but it will need to become more flexible, dynamic and resilient.

Already, our demand patterns cause difficulties, with peaks of consumption in the morning and evening. Total capacity must be capable of meeting these peaks while at the same time scaling down to the troughs. The present system balances, by and large, by flexing supply to meet demand, and it does this by using flexible but expensive and emission-producing fossil fuel plants. It is true we have some so-called "dispatchable" demand and some pumped storage which can be used to alleviate problems and there are some tools that help with system balancing.
However, we will need far more responsive mechanisms, capable of shifting large amounts of power into the lower demand periods. This is because we will face both more intermittent and less predictable supply and demand.

Wind, solar and, in the future, wave generation are intrinsically intermittent and relatively unpredictable. What is more, our dependence on weather systems can at times result in periods of depressed generation from these sources. Tidal generation is more predictable but, depending on the technologies used, is also variable. So, the energy system of the future must be able to deal with these periods of excess and shortage by means of adjusting demand to fit supply and utilising storage methods including batteries and heat storage.

The system as a whole must shift from one which increases supply to meet demand to one which flexes demand to meet supply. Operational constraints demand that we have relatively constant usage of "baseload" generation (nuclear and gas power stations). As a result, we must "shape" demand to meet the fluctuating patterns of renewable generation.

Bridge the gap

We can rely to an extent on people wasting less and using less, particularly at cheaper, "off peak" times. There are tools available here: education so the population better understands the crisis we are in; real-time information on how people can reduce consumption; "nudges" to change behaviour such as default modes of operation; and price signals that indicate when it is cleaner and cheaper to, for example, turn on the laundry. But behaviour change is notoriously difficult to achieve, and the evidence to date is that it will not achieve enough to bridge the gap.

So, a more reliable solution is needed, one which combines the power of market forces and the reliability of automated control within a new arrangement in which there is a win for all: lower bills for customers; lower costs for utilities; less need to burn fossil fuels; and, for our economy, an ability to rely on home-produced renewables rather than imported fuels.

This is what we call a smart energy system. It is why IBM and other companies such as Toshiba and Cable and Wireless have joined forces with energy retailer and network operator Scottish & Southern Energy, community interest company EcoIsland and others to create such a system on the Isle of Wight. This project will develop a range of power solutions within a smart grid and will result in the island becoming energy self-sufficient by 2020. It will bring savings and jobs, and will provide the UK with a route map to the smart energy system we need.

Jon Z Bentley is Smarter Energy Lead, IBM Global Business Services, UK and Ireland.

This article first appeared in the New Statesman supplement 'Smartening up: Powering the UK's future energy needs through innovation andtechnology', sponsored by IBM.

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