Full cir­cle for elec­tric­ity revo­lu­tion with tech­nolo­gies vy­ing for con­trol

The National - News - - BUSINESS IN DEPTH - ROBIN MILLS Robin Mills is chief ex­ec­u­tive of Qa­mar En­ergy, and au­thor of The Myth of the Oil Cri­sis

In Nikola Tesla’s burial place of Bel­grade, gi­ant coils send sparks through vis­i­tors to the Ser­bian in­ven­tor’s mu­seum. Pi­o­neer of al­ter­nat­ing cur­rent, elec­tric mo­tors, trans­form­ers, wire­less charg­ing, re­mote con­trolled boats and much more, he was one of the giants of the late 19th cen­tury elec­tric revo­lu­tion. His name has in­spired not just the epony­mous car com­pany, but also Nikola Mo­tor’s bat­tery trucks. More than a cen­tury later, the elec­tric­ity busi­ness is again en­ter­ing a phase of up­heaval.

The pe­riod from the 1870s on­wards fea­tured an ex­plo­sion in the con­sumer uses of elec­tric­ity: arc light­ing, Thomas Edi­son’s in­can­des­cent bulb, mo­tors for lifts and trams, and ra­dio.

Tesla de­vel­oped polyphase al­ter­nat­ing cur­rent (AC) and an in­duc­tion mo­tor for West­ing­house, two of the com­pany’s key in­no­va­tions in its “War of the Cur­rents” with ri­val Edi­son in the 1890s. Edi­son pro­moted di­rect cur­rent, claim­ing it was safer be­cause it worked at much lower volt­ages. But it needed much thicker wires, and could op­er­ate only over short dis­tances be­cause of high losses. The even­tual vic­tory of AC al­lowed the emer­gence of the mod­ern sys­tem of large, cen­tralised power plants.

Sa­muel In­sull started as Edi­son’s pri­vate sec­re­tary, in­tro­duced dif­fer­ent billing rates for peak and off-peak times to Amer­ica, and built a util­ity em­pire. He pushed economies of scale, build­ing larger and more ef­fi­cient coal-fired tur­bines. And he ad­vo­cated reg­u­la­tion, hav­ing his com­pa­nies granted mo­nop­o­lies over cer­tain ar­eas, in re­turn for the gov­ern­ment set­ting the prices they could charge. In­sull’s cor­po­ra­tion col­lapsed in the Great De­pres­sion, and he died of a heart at­tack on the Paris metro with 84 cents in his pocket. But the reg­u­lated util­ity model dom­i­nated the US un­til the 1990s and re­mains preva­lent in many states and world­wide.

Now the elec­tric­ity in­dus­try again faces a revo­lu­tion. The con­cate­na­tion of cli­mate change with five key tech­nolo­gies is forc­ing new busi­ness mod­els. The rise of low-cost nat­u­ral gas and the need to tackle cli­mate change has in­creas­ingly forced out re­li­able, cheap but dirty coal power from Europe and North Amer­ica. Re­new­able en­ergy, par­tic­u­larly so­lar and wind, is in­creas­ingly ef­fec­tive. As UK cli­mate change ad­viser Pro­fes­sor Michael Grubb de­scribes it, so­lar power has be­come the cheap­est wide­spread high-grade en­ergy source in hu­man his­tory.

In ar­eas such as Europe and Cal­i­for­nia, much so­lar power is in­stalled on pri­vate res­i­dences and busi­ness premises, promis­ing de­cen­tral­i­sa­tion and democrati­sa­tion of elec­tric­ity. Some en­thu­si­asts seek to go en­tirely “off-grid”. Re­mote com­mu­ni­ties in Africa may form mi­cro-grids us­ing lo­cal re­new­ables. In other ar­eas, in­clud­ing the Mid­dle East, gi­ant so­lar farms re­sem­ble tra­di­tional cen­tralised gen­er­a­tion more closely.

Vari­able re­new­able en­ergy can­not al­ways generate when needed. It has to be backed up with “dis­patch­able” fos­sil fu­els, hy­dro­elec­tric­ity or nu­clear power, or stored, typ­i­cally with bat­ter­ies. Bat­ter­ies are be­com­ing cheaper, long-lived and more en­ergy-dense, al­low­ing them to com­ple­ment re­new­ables.

Bet­ter bat­ter­ies are also fa­cil­i­tat­ing the rise of elec­tric ve­hi­cles, such as Tesla. Charg­ing cars will be­come an in­creas­ingly im­por­tant busi­ness for util­i­ties or re­tail power dis­trib­u­tors, although homes with ex­cess so­lar out­put may use their own power. The fleet of bat­tery ve­hi­cles could be syn­chro­nised to the grid, dis­charg­ing at peak de­mand times and recharg­ing when a sur­plus is avail­able, pay­ing a pre­mium to car own­ers.

This would be part of a “smart” power sys­tem, when home de­vices turn them­selves on and off to match the fluc­tu­a­tions of re­new­able gen­er­a­tion and de­mand.

The fi­nal part of the puzzle harks back to the “bat­tle of the cur­rents”. Mod­ern ul­tra-high volt­age, di­rect cur­rent ca­bles can run over con­ti­nen­tal dis­tances with low losses. At the start of last month, China, the leader in this field, opened the world’s long­est, high­est volt­age and largest ca­pac­ity DC line.

As re­new­able gen­er­a­tion in­creases, power prices may be­come neg­a­tive at times – such as a sunny but tem­per­ate spring day. At other times, for in­stance a chilly north­ern Euro­pean win­ter evening, re­new­able out­put may be min­i­mal and de­mand high.

Tra­di­tional ver­ti­cally in­te­grated util­i­ties – a sin­gle en­tity that gen­er­ates, trans­mits and sells power – can deal with these is­sues, but without un­der­stand­ing the true costs. A mar­ket-based sys­tem, such as that now span­ning most of Europe, Aus­tralia and many US states, has to al­low power prices to rise very high at times to com­pen­sate the own­ers of backup gen­er­a­tion that hardly ever runs.

Some util­i­ties, such as Ger­many’s Eon and Den­mark’s Orsted, have sold off their fos­sil fuel gen­er­a­tion en­tirely to rely on re­new­ables. Oil com­pa­nies in­clud­ing Shell and To­tal are muscling in by buy­ing so­lar, bat­tery and elec­tric car charg­ing busi­nesses.

Tesla would have been thrilled by these in­no­va­tions. In­ven­tors across China, Europe and Amer­ica seek to dom­i­nate the new world of bat­ter­ies, pan­els and grids. Lim­it­less clean and cheap power is within sight, but few ex­ist­ing com­pa­nies will sur­vive the jour­ney.

The rise of low-cost nat­u­ral gas and the need to tackle cli­mate change is forc­ing out cheap but dirty coal power

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