The Energy Revolution, real or fantasy?

Technology seems to be fast approaching a tipping point, and it is already changing the way we consume energy

When was the last time you looked at your electricity bill and paid attention to anything beyond the amount due? In Toronto, and across the region, the partly obscure “delivery charge” consists of an average of over 40% of the monthly electricity bill. As of January 1st, Toronto Hydro raised the delivery charge by $6 monthly for an average consumer, or approximately a 5% hike in the overall bill.

This cost is mainly split into two parts; Transmission and Distribution. Toronto Hydro defines the transmission charges as, “… the charge covers the costs involved to transmit electricity from generators to the city. Toronto Hydro passes this cost through to you, without mark-up”. The distribution charge is the cost involved in getting electricity to individual homes.

The bulk of the cost hence grows as a result of the necessary intermediary of long-distance transmission, with all its energy losses (between 8- 10%), high capital expenditure needs and high maintenance requirements. The reason for these costs is the centralized transmission grid system which creates the backbone of our energy infrastructure.

Could such costs be reduced, while improving transparency and eliminating built-in redundancy?

The “Energy Revolution” claims it has a long term, systemic and sustainable answer to this, one which is based on collaborative consumption (sharing economy) which has already revolutionized our daily life.

The current energy infrastructure is elitist in nature (rare, and requires high capital to acquire) and it has benefitted the world’s wealthiest the most. Regions rich in oil and gas have accomplished historic growth while regions without having struggled to keep pace, instead of relying on agriculture, textiles, and tourism.

The First and Second Industrial revolutions — a period which represents the longest sustained growth in the world economy — were most greatly influenced by how energy was harnessed and exploited. This is because to harness and use energy on the scale required to make profits, large amounts of capital had to be gathered via a huge central system, such as a bank, another elite structure in itself, and this capital then directed towards harnessing this energy and putting it to work. From this logic, it follows that the next Industrial Revolution would be characterized by the next Energy Revolution.

Over the last three decades distributed capitalism has been able to firmly set its roots and is now firmly the economy that the consumer market seems to have demanded. The previously oppositional relationship between vendors and purchasers has been replaced by a cooperative relationship between producers and consumers, giving rise to the ‘prosumer’ culture. Transparency has been given value over secrecy in all industries. Peer-to-peer sharing of assets, services, knowledge, and information has already revolutionized the way we live in the internet era. Airbnb enabled hosts to generate income off their homes, Uber did the same with cars. MOOCs and Wikipedia enable thousands of professionals and amateurs to share knowledge. Amazon and eBay changed the way we shop, enabling almost any individual to sell and buy as they see fit on a large platform. In today’s platform-driven economy, the Internet of Things and social networks have accelerated and enabled the 2.5 quintillion bytes of data created each day (!) to be shared and acted upon at a rate which has forced info, data and mainstream news giants to adapt or risk failing.

Source: DOMO. Data never sleeps
Source: DOMO. Data never sleeps

The rise of 3-D printing even promises to bring about distributed capitalism to manufacturing, while utilizing about 90% less raw material and creating a near-infinite number of products.

The energy industry, although it has seen some change, is yet to experience change on a scale that other major industries have seen. This might be for various reasons, most notably because it is such a basic unit of our daily life that according to the Kübler-Ross change model, it would take longer to accept such change. However, today, the technology needed to make this change is available, accessible and most importantly, it is affordable. Concepts which are often conjoined in with these technologies, concepts such as; ‘Collaborative consumption’, ‘Sharing Economy’ and ‘Prosumers’, how can concepts like these even apply to the way we use energy.

In 2008, Hans-Gert Pöttering, then president of the European Parliament, powerfully claimed, “This is no Utopia, no futuristic vision: in twenty-five years’ time, we will be able to construct each building as its own ‘mini-power station’ producing clean and renewable energy for its own needs… the third industrial revolution offers us a chance to put the European economy on a forward-looking and sustainable footing and, it that way, secure its competitiveness in the long term.” Today, almost half-way through Hans’ timeline, there are multiple success stories of fully self-sustained homes and fully electric vehicles every bit as powerful as fuel-driven ones.

Let’s briefly consider the case for solar, a non-invasive option for homeowners. The utilization of rooftop solar PV panels is no new concept, in fact, the first-ever rooftop PV solar array was installed by Charles Fritts in 1884, using a 1%-efficient solar array of selenium cells. While they are not yet available on the market, researchers have been able to create solar panels with efficiency as high as 46%, and these technologies will only become more affordable as more R&D is invested. On average, over the last decade, the payback time has dropped from 8–10 years to as low as 2 years. Homes owners of solar PV have been able to net a profit from these, not only by the savings on their monthly bill but also by selling excess energy back to the grid. This energy that is sent to the grid is then distributed to another resident. In a way, these residents are already selling energy to their neighbors, implying lateral movement of energy as opposed to the conventional plant-to-grid-to-home system. Furthermore, the reality of combining this with other distributed technologies is even more beneficial. Capital costs in acquiring this energy in bulk for a community can be crowdfunded via the internet, managed and secured via blockchain and distributed locally via a microgrid.

This would indeed greatly reduce costs on the bill payers, eliminate redundancy of a heavily centralized system and improve transparency as information is readily available to everyone on the network.

Given the evidence, the energy revolution is very much viable and real. The critical premise of the energy revolution is a means to be economically sustainable and act consciously towards the biosphere we live in to mitigate climate change to prevent impending mass extinction of animal life and irreversible changes to the planet chemistry.

All Rights Reserved for Kanjo Melo

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