You already know that renewables are intermittent. It’s quite a problem. But did you know that you are personally responsible for providing 25% of the solution?
That’s according to International Energy Agency estimates.
They pondered how electricity grids will deal with renewables’ intermittency.
And presume up to 25% of the grid’s future ‘flexibility’ will come from what they call ‘demand response.’
What is it? It’s you deciding to change your life to suit renewable energy’s vagaries.
But will you? And if you don’t, what happens next?
That’s what we’re going to find out. Not just in today’s article. But the hard way, too.
Who’s in charge?
The trouble with renewables is not really their intermittency. It’s the unpredictable and uncontrollable nature of that intermittency. Our electricity system needs to be able to handle it.
There are two ways to do this. We can convert unreliable and uncontrollable renewable energy into something dispatchable. Or we can change our lifestyle to suit what renewable energy provides.
As ever, the answer lies somewhere in between, right?
Well, that’s not how we currently do things.
I don’t give a second thought to whether it’s windy or sunny enough to turn on my washing machine.
That’s because we manage power supply to meet demand. We have enough dispatchable power to make sure everyone can run their air con on a hot day.
But we are not in control of renewable energy’s intermittency. And so our future energy use will have to be what is managed to suit supply. Smart Meters that track your power and surge pricing are how.
I’m in favour of using the price mechanism to ration power. It’s better than the other form of rationing – political decision making by civil servants.
But it’s got to be predictable to work. You can’t run a business if you don’t know what your price of electricity will be. Especially given the reliability of weather forecasts.
Cue an excellent report from the ABC about a bakery in North Queensland:
‘At a time when Australians are being encouraged – in some cases induced – to shift away from gas appliances and towards electric ones, the Boscaccis are steering the opposite course.
‘Mr Boscacci blames a complex and little-known electricity pricing scheme known as a demand tariff for the decision.
‘Demand tariffs are based on the maximum amount of power a customer draws from the grid over any 30-minute period during peak hours in the evening.
‘Mr Boscacci says the family have tried to work out ways to reduce their demand at peak times, but the nature of the business means they have little room to move if they want to keep using power.
‘He describes the switch to gas as a last resort, coming despite the rising price of the fuel and its unpredictability.’
As dictated by the Cobra Effect, government policies have backfired once again. The program to encourage electrification has achieved the opposite.
Over in Canada, they’ve already tried and tested surge pricing and time of use tariffs (TOU). The idea was simple. By passing on volatile energy prices to consumers, the grid’s demand can be managed to meet supply.
The UK’s Telegraph newspaper covered the government report on the results:
‘“Consumption patterns of retail [fixed] and TOU ratepayers were about the same, suggesting that TOU pricing provided no more incentive to change usage behaviour than retail [fixed] contracts,” it said.’
In other words, charging people more for electricity at peak times doesn’t cause them to shift their power use. So charging people for electricity based on intermittent supply won’t either. Unless you have crazy prices…
I suspect surge pricing and other ‘demand management’ policies will prove too unpopular anyway. They aren’t a viable means to manage the electricity grid in a democracy. People don’t want it.
This means that governments will be robbed of a key source of grid stability. One they are relying on to manage our electricity demand.
What happens without 25% demand response?
What happens if people refuse to change their habits to suit renewable energy? The existing plans for the energy transition fall apart.
What happens next is up for debate.
We could build an even larger grid with even more renewables capacity.
What would this mean for cost? The European Round Table for Industry took a stab. Their report summed it up like this for the EU:
‘A failure to fully active flexibility from buildings, electric vehicles, and industry in 2030 would require €11.1 billion–€29.1 billion higher investments annually in the distribution grid.’
That’s a blowout cost…
Even that would leave risks. How was laid out by Texas’ electricity grid management company ERCOT.
Last month it warned of an ‘immediate catastrophic grid failure’ for the electricity grid. Flaws in some solar, wind and battery storage resources were blamed. They’d left the system vulnerable to shocks. That’s because each part relies on every other part functioning. One lightning strike would take the whole thing down.
That’s what happened in the UK in 2019. A lighting bolt struck one part of the grid and households in three different countries experience a blackout!
Another possible scenario is called ‘Absolute Zero’. A group of universities called FIRES worked on it. Their analysis asked what Net Zero would look like under current technologies. And discovered you won’t be going on holiday or eating meat anymore.
Of course, technology is constantly advancing. Just consider this rather extraordinary example. But punting our future on something that uncertain seems rather risky.
I don’t know whether we’re in for a 25% curtailment to your quality of life, whopping energy bills, frequent blackouts or energy dystopia. But I know the energy transition is about to get downright sinister.
Until next time,
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Nick Hubble,
Editor, Strategic Intelligence Australia
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