Everyone knows that the demands on energy networks are changing faster than ever before. In five theses, futurologist Lars Thomsen shows where the trend is heading and what opportunities are emerging.
Five theses on the future of power grids
Futurologist Lars Thomsen shows why the energy industry should act quickly and what it stands to gain.
Five theses on the future of power grids
Futurologist Lars Thomsen shows why the energy industry should act quickly and what it stands to gain.
1. We get intelligent, breathing networks.
We see two major trends in the energy industry: 1. renewable energy generation is booming. This puts a strain on the grids due to higher volatility. 2. fossil fuels are gradually being replaced by electricity. As a result, electricity demand will have doubled in 20 years. Both developments can only be controlled if we intelligently distribute renewable generation, controllable loads and mobile and stationary storage in a breathing grid. This can be achieved via so-called smart grids, which can recognize consumption patterns and react to them. The second solution applications are all kinds of electricity storage systems that balance out volatile feed-in. If I were a manufacturer or strategic investor, I would invest in technology providers around smart grids and electricity storage.
20 Years
electricity demand will have doubled in 20 years.
2. Investments in energy infrastructure pay off quickly.
And this is the first time in the history of the energy industry! Because until now, the rule was: high and regulated initial investment, long payback periods. That was convenient for the established players, but there was little competition and innovation. That is changing now. Companies like IBM, Tesla or Google are waiting in the wings to shake up unregulated parts of the energy networks with software and AI solutions. This is putting the established energy industry under pressure to innovate - and it's not used to that.
The good news, however, is that these investments will quickly pay off, as they are targeted where new technologies can most profitably deploy the disruptions and promise the highest benefits. In particular, investments in innovative software, peak shaving and rapid response systems, peak smoothing batteries, DC fast charging infrastructure, smart distributed storage fleets are likely to boom in the coming years. In addition, large parts of the processes around billing and system control are changing, such as blockchain-based smart contracts and market-led tariff and billing systems.
3. Electricity price tariffs become even more variable.
And all the way down to the consumer level. As the volatility of feed-in increases and "grid-friendly" offtake should be rewarded, there will be a controlling market mechanism through fluctuating prices down to the individual end consumer. Prices will then follow the logic of supply and demand more closely than before, because with a high proportion of renewable sources, we will always have either too much or too little electricity in the grid. If consumers contribute to relieving the load on the grids, they pay a lower price as a reward. This will also increase demand for smart grids and technologies for smart homes, private or commercial generation and storage solutions, plus special tariffs for e-mobility.
4. E-cars are both the problem and part of the solution.
Anyone who buys an e-car doubles their annual electricity consumption in one fell swoop. This is why the growth of the e-car fleet in all countries is an immense challenge for energy networks. But an e-car is not just a large consumer, it is also an intelligently controllable energy store! It can also deliver energy, for example to its owner's smart home, and either interrupt charging or even provide energy at times of peak load, reducing pressure on the overall grid. It could charge automatically when the peak load has passed.
„For the first time in history, investments will pay off quickly.“
5. Renewable energy sources are increasing either way.
Most people will agree that the expansion of regenerative sources makes sense. Climate change suggests this to us, and most of the world's governments are pushing the expansion. However, you don't have to be a climate or environmental activist to back wind and solar energy. A basic knowledge of business administration is enough, because: Operating a coal-fired power plant, for example, is hardly worthwhile anymore. Meanwhile, the return on investment for renewable energy sources is accelerating. Especially in the case of solar energy. Here, the timeframe is only six to eight years. That would correspond to an investment on the capital market with a secure interest rate of around eight percent! Whether it's a home or an industrial park, you'd have to be a bit stupid not to put photovoltaic cells on a newly built roof.
About the Person
Lars Thomsen, trend and futurologist, born in Hamburg in 1968, is an expert on the future of energy, mobility and smart networks. With his company future matters AG in Zurich, he and a team of European futurologists advise entrepreneurs companies, corporations, institutions, and government-related bodies in Europe on the development of future strategies. He is also a member of numerous think tanks and the World Future Society in Washington, D.C. Lars Thomsen lives with his family on Lake Zurich in Switzerland.
