70% renewables by 2050? It's doable with 'Internet of Energy'

Within a generation, it is likely that most of the world’s electricity will be from renewable sources, according to some 1,600 professionals in the power industry.

Getting to that future is not a grid issue, not a hardware issue, but rather a massive opportunity for software using communication technology to manage the flow of energy from storage and distributed generation facilities to meet demand on the grid.

Those were findings of a three-month survey conducted by global energy consultancy DNV-GL of project developers, utility system operators, policy makers, regulators, consultants, equipment manufacturers, bankers and and entrepreneurs from 71 countries.

“Eight out of 10 respondents believe that the electricity system can be 70 percent renewable by 2050. Almost half of them believe this can be achieved in the next 15 years,” said report author Felicity Jones, a senior consultant at DNV-GL, on a conference call Tuesday.

In more tangible terms, that could mean that by the time today’s children are adults, they could be changing the paradigm that economic development automatically comes with air pollution. For businesses and governments, such a shift would punctuate recent debate about the feasibility of encouraging economic growth without simultaneously increasing harmful environmental impacts.

The catch: it will take innovation, new energy management systems and a rethinking of predominant energy infrastructure to realize a future where a large majority of the world is powered by renewable energy in 2050.

But some technology in play — most principally the Internet of Things — is ready to be applied to large-scale energy distribution.  

“As we reach toward the Internet of Energy, the challenge is smart aggregation and operation of distributed resources to realize these multiple values," said Ali Nourai, DNV-GL's storage segment director, on the call.

Changing the model

If businesses, public policymakers and ordinary citizens can adapt to new sources of energy, the not-so-distant future could look very different.

In developing countries, the growth of electricity could skip the building of big power plants with centrally controlled grids, and instead evolve from smaller, distributed renewable electricity generators linked and managed by Internet-based software. Those systems most likely would include storage technologies allowing solar and wind power to provide the load even at night or when the air is still.

That kind of leap in energy would be analogous to the way the telephone industry in developing nations jumped straight to cell phone technology and bypassed installations of landlines.

“The electricity sector is becoming more interconnected with information and communications sectors," said Jones of DNV-GL. "The future of electricity does not rely on the energy sector at all."

Rather, the firm's analysis after those 1,600 surveys is that “new business models” focused on opportunities presented by Internet of Things-based communications software and storage technologies are what ultimately will drive change.

“When we asked about enablers, storage and smart grids jumped off the page,” Jones said. “The intense industry interest in energy storage is opening the door for new market opportunities.”

Indeed, the race to find new energy storage solutions already is beginning to play out; last week, SolarCity announced a new micro-grid product that uses battery storage technology developed by Tesla Motors (as both clean tech companies were founded by tech entrepreneur Elon Musk) to enable cities to have solar-powered back up grids. 

Tesla is also working on what it calls a “home battery” which has yet to be formally announced but which presumably will allow homeowners and businesses to store solar power generated on their rooftops, along with a multibillion-dollar battery "gigafactory" in Nevada. Other companies, including GE, Aquion Energy, Princeton Power and STEM, also are innovating in energy storage.

Paying for our future energy

Indeed, DNV-GL found that political will more than anything was the biggest hurdle to overcome in getting to a renewables future.

Asked who needed to be involved, or persuaded, to realize 70 percent renewable energy adoption by 2050, respondents overwhelmingly answered “politicians and policy makers.” Their most common concern: costs.

Utility system operators were seen as the second most essential group to involve — or convert — to a renewable energy shift. Their top concern is reliability (although the potential for new competition is also certainly part of the equation).

Peter Vaessen, DNV-GL's transmissions segment grid director, said the perceived dynamic of “policy makers demanding affordability and system operators demanding reliability,” is a false metric, or bar, for switching to renewables.

That's where he sees the forecast on an electricity market defined by smaller, more flexible distributed wind and solar systems coming into play.

“It’s all about increasing the flexibility,” Vaessen said. "It’s about finding reliable solutions through sensors and smart meters” that can shift supply around around to meet demand and to draw from storage as seamlessly as from other parts of currently generated energy.

In already developed markets where utilities deliver electricity from a centralized grid, a shift to a majority renewables electricity industry is also underway.

But it won’t happen within current constraints. The idea of slowly “integrating” renewable energy supplies into grids mainly supplied by fossil fuel sources has to be upended, the survey concluded — a seemingly daunting prospect that might not be as insurmountable as it initially seems.

Nourai, DNV-GL's storage segment director, said other industries have shown that cost is not the driver in market acceptance if indisputable value, perhaps brought with other capabilities, also are brought online.

“Think about the iPhone.  Apple could have made a cheaper cell phone," he said. "Instead, they expanded the value of a cellphone. That developed the market. If the benefit is big enough, cost does not matter. The iPhone sold for $500 because of all those benefits."