Spiralling UK energy prices and the collapse of several power suppliers recently has illustrated the danger of over-reliance for our energy needs on large companies. And with the rise of distributed renewable power sources, such as roof top solar and battery storage, the time is ripe for a re-think of our energy systems.
The fact that UK energy prices were caught up in geopolitical wrangles between Russia and Europe demonstrates the urgent need for energy self-sufficiency. And news our energy bills are projected to soar 30% next year further illuminates the risks of a volatile global energy market.
The situation is also severely affecting our economy and net zero emissions targets. High gas prices mean industries such as steel, chemical and fertiliser may have to suspend production or switch to dirty fuel. It is increasingly clear the UK will struggle to balance its recent COP26 net zero commitments with rising demand on overburdened energy grids.
Decentralising the market
The fundamental challenge is that the UK’s adoption of decentralised renewable power sources, such as solar, has not yet been matched by a parallel decentralisation of the energy sector. Market competition has failed to empower energy users to achieve best value due to the complexity of constantly choosing and changing tariffs or suppliers. And 6% of UK wind power was wasted or curtailed last year due to low demand, highlighting the inefficiency of a centralised grid which must balance local supply with national demand.
The current gas price crisis shows how a centralised grid also leaves the economy exposed to global market instability and price volatility. Meanwhile, the vulnerability of the economy to power outages from extreme weather events demonstrates how a national grid could become a single point of failure for services reliant on electricity.
The recent energy market volatility reveals the urgent imperative for the democratisation of power generation to make businesses and communities more self-sufficient. We can only deliver reliable, cheap and clean power if we stop outsourcing all of our energy needs to centralised suppliers. Self-generation would create more dispersed, resilient grids without a single point of failure, and would safeguard businesses and local authorities against future fluctuations in energy prices.
Furthermore, it would dramatically ease the burden on the national grid and give communities a stable power source. Crucially, by easing demand for electricity from central suppliers, decentralisation would make it easier for energy firms to meet net zero commitments.
With the price of solar power dropping and its performance improving due to recent technology, solar self-generation offers an ideal way for businesses to decarbonise and protect themselves against recent market volatility. Employers could even provide free, self-powered solar car charging facilities in offices as an extra perk to encourage returning to the office.
Self-sufficient industries and regions
Organisations that need dependable 24-hour power sources such as e-commerce warehouses, cold storage facilities and farms could use solar to provide reliable low-cost, zero-carbon power off the grid. We recently worked with a local authority of a major UK city to develop recommendations for 375 electric vehicle charging points powered by a fully-integrated solar PV farm, battery storage system, vertical green wall and an integrated hydroponics facility in a car park. It offers a microcosm of how the UK could create self-sufficient, off-the-grid transport networks, businesses and public infrastructure.
Larger organisations could also supplement solar with additional power sources such as hydrogen fuelled combined heat and power (CHP) to provide extra generating capacity. For example, we’ve advised a large chemicals company on how they could harness crops from surrounding farmland as biofuel to generate their own power through a CHP plant. A fusion of different power sources could also be combined to extend devolved power across cities and regions, helping entire areas live off the grid.
Our current collaboration with SMEs, energy companies and a UK city council will see a smart cross-energy vector system integrating heat, power and transport to deliver decentralised power at city-wide scale. A smaller-scale version has already helped create a fully self-powered university campus and achieve 32% energy savings.
Re-imagining energy supply
These projects offer an example of how devolving power to businesses and local authorities across the country could help create more clean, stable and self-sufficient power. Hospitals often rely on power from backup diesel generators for emergencies for instance, but could instead use behind-the-metre renewable sources to provide clean on-site backup power.
Similarly, imagine logistics fleets using locally-produced hydrogen to fuel future hydrogen truck fleets. Surplus self-generated power could also be stored and sold back to the central grid by businesses and councils, helping balance national supply and demand from local sources. Ultimately, this could generate a national circular economy of energy where surplus power is stored and circulated to other industries so that waste is continuously converted into productivity. It would also produce peer-to-peer energy markets to challenge the monopoly power of major energy firms.
A bottom-up system of energy generation and trading would mirror the old grassroots financial system of locally-run credit unions and co-operatives. We could see smart storage and vehicle-to-grid technologies empowering ordinary people to product and profit from power, just as blockchain democratised financial services.
The key to escaping the cycle of energy price rises and missed climate targets is to restore control of our own power supplies and create sustainable low-cost, local power for local communities. Democratising energy will enable communities to manage their own resources and environmental footprint by literally and figuratively returning power to the people.