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Seven things you need to know about the future of energy

The energy industry of old just doesn’t cut it anymore, and time is running out to switch to cleaner and smarter ways of providing power before it’s too late. As the Intergovernmental Panel on Climate Change warned in its report released in early October, based on current emissions levels the world will reach 1.5 degrees Celsius degrees of warming, compared to pre-industrial, temperatures, by 2030.

So what can be done? At WIRED Smarter some of the smartest minds in the energy world came together to explore what the future of the energy industry might look like. Here’s the best of what we learned from a packed speaker line-up that included Bulb CEO Hayden Wood, Verv COO Maria McKavanagh and DeepMind’s Sims Witherspoon.

1. Little pushes can add up to big changes in customer behaviour

“What we find is that by having a relationship with customers we can change their behaviour,” says Hayden Wood, CEO of clean energy supplier Bulb. His customers who received annual energy reports ended up reducing their energy usage by two per cent, compared to those who didn’t receive the reports.

That might not sound like much, but it is estimated that if everyone in the UK made the same change that’d save customers £560 million a year, and stop 36m tonnes of CO2 being released into the atmosphere, Wood says.

2. Cutting down CO2 emissions isn’t enough – we have to remove them too

“We will need to reduce CO2 in the atmosphere,” if we’re to stop the most extreme impacts of climate change says Jan Wurzbacher, founder and director of Climeworks, a start-up that builds infrastructure to capture carbon from the atmosphere and lock it deep underground.

Last year in Zurich, Climeworks plants removed 900 tonnes of CO2 that was used to supply greenhouses. But his goal is to eliminate eight billion tonnes from the atmosphere, and to do that he needs policymakers to wake up to the potential benefits of carbon capture. “Changes in policy are much easier if we show there are solutions and we’re not 100 years away,” Wurzbacher says.

3. AI isn’t a fix-all cure, but it is a powerful tool for energy efficiency

“Artificial intelligence is not magic sparkle dust,” says Sims Witherspoon, applied artificial intelligence program manager at DeepMind. But if you’re smart about how you use it, AI could have a huge impact on how we heat and cool our buildings.

“AI can show us creativity but it also has the ability to show us new knowledge,” she says. By using AI to analyse energy use in Google’s data centres, the firm was able to save 30 per cent on energy by switching to an AI system that optimised the cooling system in real-time. And there’s potentially no limit to the gains that these kinds of systems can squeeze out, Witherspoon says. “Rules and heuristics don’t get better – AI does.”

4. Smarter energy forecasts could cut down on the amount of energy used

“Today’s energy system is broken, it has failed to innovate at the same rate as other industries and as a result it is in a race to zero profits,” says Maria McKavanagh, COO at Verv, a company that builds intelligent home hubs that track a home’s energy usage. But by accurately predicting the amount of energy a home will use, she says it could allow people to trade energy with their neighbours.

“We can forecast more accurately than anyone else what the energy consumption of that house is going to be in the next five minutes, hours, or even few months,” McKavanagh says. Verv’s monitoring system samples energy usage millions of times every second and then uses that data to predict future energy usage.

And if energy providers got their hands on this data, they could use it to target energy supply to the right areas at the right times, cutting down on wasted energy product. “If the national grid could forecast with extreme accuracy the energy requirements of every home, we would be able to service that demand,” she says.

5. Energy users might be the people that end up driving change

“Consumers are actually far more forward-thinking than government can sometimes be,” says Juliet Davenport, CEO of renewable energy firm Good Energy. “We’re going to have to make it easier if we’re going to get massive uptake of renewables.”

This means making it easier for people to switch to renewable providers and giving people more options – such as letting them buy excess renewable energy from neighbours over a peer-to-peer marketplace. And at the heart of this all is making products that people want to use, Davenport says. “We have to put ourselves in people’s shoes when we’re designing for people, whether that’s a potato peeler or an energy app.”

6. It’s time to stop thinking about energy supply and start thinking about demand

Deptford power station – then the world’s largest energy facility – first rumbled into action on the south bank of the River Thames in 1891. Since then, the logistics of energy distribution have changed fairly little, says Stephen Fitzpatrick, CEO of the energy firm OVO energy.

“You build a large power station, you have a very long wire and you put customers at the end of is,” Fitzpatrick says, and the only way of meeting demand is raising the output of those vast power stations. But it’s time for that to change. Fitzpatrick says we should be connecting our energy supplies to the internet, so we can better predict and manage demand, flipping the previous way of distributing energy on its head. “We need to control the demand to meet the supply,” he says.

[h2]Smart homes might not be as clever as we might think/h2]

It’s all very well having connected smart devices that monitor our energy usage, let us set alarms through voice control and adjust the thermostat, but is this technology really as futuristic as it seems? Designer and author Alexandra Deschamps-Sonsino isn’t so sure.

“The home is not a system,” Deschamps-Sonsino says – and we should be wary about devices that reduce our living spaces to slickly-oiled, impersonal machines. Why? Well, the impact of smart devices might stretch far beyond our homes and impact how we use public spaces. “Space dictates what people will and won’t do, how much time they’ll spend in places and how they’ll use the rest of the city as well,” she says.

7. It’s time for the green battery revolution

About two-thirds of all of the energy that’s produced in the world ends up being wasted, says Martin Anderlind, chief business development officer at battery firm Northvolt. The problem? There aren’t enough storage options to keep that energy around until its needed.

“We need to be able to store energy in time, not just be able to move it around geographically,” Anderlind says. And this means investing big in battery production. In 2021, Northvolt is planning on opening a 370 megawatt factory in Vasteras, Sweden, that should be able to produce 200 batteries a month.

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How businesses can make smarter energy decisions

Ever since the Intergovernmental Panel on Climate Change and United Nations Framework Convention on Climate Change were established, the UK has been on a journey – a journey to become a low-carbon nation. The recent announcement of the Streamlined Energy Carbon Reporting scheme (SECR), designed to help businesses as they become more energy conscious, is just the latest stage in this transition.

The SECR is a proposed new reporting scheme from the Government. It is set to replace the Carbon Reduction Commitment (CRC), which is due to end in 2019. It aims to use energy efficiency as a mechanism to help increase business productivity. And it will also improve the security of energy supplies, as the goal is to reduce current use by at least 20 per cent before 2030.

So who will this affect and what will it involve?

SECR is aimed at companies with at least 250 employees or an annual turnover greater than £36m, as well as an annual balance sheet greater than £18m. The number of companies reporting into the SECR will include those in the Energy Saving Opportunities Scheme (ESOS), taking the number of businesses involved from 1,200 to 11,900.

If you fall into this category then you’ll be automatically entered into the scheme and your energy use, carbon emissions and energy efficiency actions will be made publicly available, with a suitable intensity metric for reference.

What does this mean for these businesses?

For those who aren’t already on their energy efficiency journey, SECR will likely mean additional administrative costs. But if 20 per cent improvements in energy efficiency can be achieved, that can have its own financial advantages.

So what can businesses do?

An energy management system that encompasses people, process and technology will make reporting for regulatory purposes a much smoother process. But companies should go back to the basics of energy management and analyse their operations to understand the meaningful and sustainable changes they can make.

Here are our six steps to help:

Step 1 – Get everyone involved

Start everyone from across your business talking about energy. Make sure to get buy-in on any new initiatives from your senior management. After all, without their commitment, energy management may falter and can be marginalised.

Step 2 – Write an effective energy policy articulating your organisation’s commitment

This should: set an objective, define targets, develop an action plan, establish accountability, ensure continuous improvement and ensure compliance.

Step 3 – Assess your energy performance

As they say, “to measure is to manage”. Understand your past and present energy performance in order to establish benchmarks and begin understanding your energy use patterns and trends. SECR will be a good starting point.

Step 4 – Conduct energy audits

This will help you identify areas of energy savings within your organisation, whether this be by engaging staff, streamlining processes or installing energy efficient technology. Perhaps all three. So dust off that ESOS report or energy survey or perhaps take a fresh look and audit all aspects that affect energy performance: people, process and technology.

Step 5 – Prioritise

Make sure to prioritise your projects and get them done.

Step 6 – Monitor the benefits

Keep an eye on the results of your projects and communicate these to your senior management. It might make justifying capital expenditure easier in future if your energy projects have a proven record of delivering savings. So, sit back, relax and reap the rewards…but don’t get complacent, always strive to improve.

Ultimately, the best thing businesses can do is to get on board the energy efficiency band wagon as soon as possible.

Energy efficiency is beneficial to all businesses, including SMEs, as it removes unnecessary costs from your business. By understanding where your starting point is, you are already on your first steps to helping the UK’s clean energy agenda, as well as becoming a more cost-effective business.

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Taiwan’s transparency attracts energy finance law firm

Taiwan’s emergence as an energy investment destination could create new openings for Taiwanese companies far beyond the energy sector, as Asia’s thriving economies need energy, international law firm White & Case LLP said in a report yesterday.

The government aims to end nuclear power generation by 2025, by which time 20 percent of electricity should be generated from renewable sources and 50 percent from natural gas.

Offshore wind is a key component of the plan, with ambitions to install 5.5 gigawatts of offshore wind capacity by 2025.

With the growing cost efficiency of renewable energy and the emerging viability of battery storage technology, energy generation is nearing an inflection point, the consultancy said, adding that the shifting market dynamic in the oil-and-gas sector has seen liquid natural gas-to-power emerge as a viable alternative to coal-fired power generation in Asia.

Lower barriers to entry in renewables have given rise to a new breed of developers and investors who compete confidently against the traditional energy utilities and drive innovation in technology, development strategy and capital, it said.

Interest from international investors and financiers in the Taiwanese offshore wind sector has been intense, with market participants enthusiastically jockeying for position, it said.

Factors that help differentiate the local offshore wind sector from other Asian markets include strong government commitment, a transparent pipeline of opportunity, attractive feed-in tariffs and the potential for Taiwan to serve as a foothold for firms looking to build a presence in other emerging offshore wind markets in Asia, the consultancy said.

The investment-grade creditworthiness of Taiwan Power Co (Taipower, 台電) also lends significant support to the industry, it said.

In addition, there is no competition from firms from China, the largest offshore wind market in Asia and the third-largest in the world, White & Case said.

Still, a gap remains between ambition and practical delivery in the region, most noticeably because of slow and opaque approval processes, it said, adding that a lack of coordination among government authorities has also led to disappointments.

A key aspect of international involvement in the Taiwanese offshore wind sector is the pursuit of limited-recourse project finance, it said.

This means that financiers lend solely on the basis of the project and its cash flows, without additional financial guarantees from the project developer, it said.

Regional Energy News – September 2013

https://s3-eu-central-1.amazonaws.com/centaur-wp/thelawyer/prod/content/uploads/2013/10/Regional-energy-news_414906.pdf

Karanovic & Nikolic has released the September 2013 issue of its Regional Energy News publication, which covers the following regions: Serbia, Macedonia, Montenegro, Croatia and Bosnia & Herzegovina.