Some thoughts on future energy supply, such as an “Instantaneous Energy Market”

By: Peter Cook

We all know that it’s time to stop using fossil fuels, due to the greenhouse gasses emitted and the finite amount of these fuels.  Many renewable sources of energy are now being adopted but a lot of work and ingenuity will be needed for these to become the only sources of energy, and most people will need to be involved to make this happen.

A very different energy grid will be needed with multiple supplies (see figure), instead of the few large power companies at present, plus a lot of storage rather than just the National Grid balancing the load.  However, this should be seen as an opportunity not a problem.

There will be many opportunities for small companies and individuals to get involved, by generating their own electricity to sell, or by storing energy for other people, or by using energy in more efficient ways.  This could encourage a new entrepreneurial society, speeding up the adoption of new technology and the transition from fossil fuels to renewable energy.

A possible way to create the new energy grid would be to set up an “Instantaneous Energy Market”

Sources of renewable energy are often criticised for being intermittent, and their widespread adoption is dismissed as impractical because of the problems in matching energy supply to demand. These critics claim we need large-scale energy storage or backup sources of energy.  But is this way of thinking correct?  What about matching the demand to the supply instead?

Like other products, electricity can be priced according to supply and demand, and in many places, electricity is already cheaper at night than during the day.  Many of us make use of this, charging our storage heaters and running our washing machines and dishwashers at night, but this has the potential to be taken much further.  Prices could be adjusted second by second according to the instantaneous supply and demand.  Many uses such as heating, water heating and charging do not need to be on continuously and could be stopped for short periods, if demand (and price) became particularly high, without causing much inconvenience.

To do this the electricity supply would need to include a signal to show the price.  At present, the mains alternating current frequency is usually 60 Hz, but the frequency is reduced if the supply is low, so small changes to the frequency could be used to show the price.  There could also be information on how the supply, demand and price are changing in the short term, which would be used to predict the price in the very near future (minutes) to help people manage the changing price.  While on longer timescales (days) there could be electricity price forecasts, which would depend on the weather (sun and wind for supply, extra demand in cold weather), problems with supply, and large demands (during popular TV shows), which people could use to plan their electricity use and so reduce costs.

People who generate their own electricity (e.g. from solar panels) could sell their excess power, using large batteries to store electricity when it’s cheap and then sell it when the price increases.  Others could just have a large battery to buy electricity cheap and sell dear.  With this control of electricity demand and supply, adding new sources of energy would be easier, and energy suppliers would have less need for backup sources.

With many people adjusting their demand according to price, changes would be smoothed and variations in the price kept to a minimum.  When electricity is cheap, the resulting increase in energy use would lead to a price rise, whilst when electricity is expensive, the resulting drop in demand and increased electricity supply from people selling their own electricity would lead to a price fall.  People would also set their own thresholds of when to use electricity or not so that abrupt jumps in the overall demand would be avoided.  Attempts at profiteering (storing energy to raise the price) would be difficult because of the large amount of storage that would be needed.

The use of instantaneous energy pricing might work better at a local rather than at a national level, and modelling studies are required to see how it would work in practice, identify potential problems and to investigate the extent to which such a system could be scaled up.

Reference

The attached figure (but not any of the above text) is from the paper “Smart management system for improving the reliability and availability of substations in smart grid with distributed generation”, by Shady S. Refaat and Amira Mohamed, January 2019, The Journal of Engineering (17), DOI:10.1049/joe.2018.8215

 

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