Disruptive technology: The spectre of the unknown
The threat posed by “disruptive technology” to gas-fired power was acknowledged at annual industry event Flame in May. In an article recently published in Gas Matters, we explore various emerging “disruptive” technologies and their implications for thermal power…
The gas industry stands firm in its conviction that it will benefit from carbon-reduction policy by superseding dirty coal-fired power and partnering with renewable energy. But this confidence overlooks the spectre of the unknown – the nascent technologies that could pull the rug out from under traditional thermal power.
Power sector gas demand forms the cornerstone of industry optimism with regards to its role in the primary energy mix. But new technological developments are gathering pace, and with global leaders now apparently united in the push towards low-carbon power networks, the energy industry can expect politicians to encourage the development of efficient and cost-effective ways to enable renewables and manage demand.
Once a cost-effective, efficient and reliable technological solution to the renewable intermittency issue materialises (turbines don’t generate electricity when the wind doesn’t blow; likewise solar panels don’t work when it’s cloudy), it could potentially spell disaster for gas-fired generators banking on a backup role to green power.
In fact, there are a number of technologies in the offing that have the potential to enable renewables and cut gas demand growth. First and centre is energy storage, which remains the Holy Grail for variable renewables. It is easy to see why: if energy from resources such as wind power or solar PV can be stored and dispatched on demand, it could eliminate the grid instability problems caused by intermittent renewables and greatly reduce the need for gas-fired power.
Storage technology is not just limited to batteries. Several companies are currently working on compressed air storage, either underground or underwater using a similar principle to pumped hydro storage. And the so-called “Internet of Things”, whereby web-connected devices interact with each other, is also now growing more rapidly with the rise of smartphones and online devices.
This has implications for both demand-side management – which could see smart grid operators using the Internet of Things to flex demand and sell tailored energy contracts based on data compiled from a host of appliances – and energy efficiency.
So how likely are these emerging technologies to develop to the point where they disrupt the status quo? Emerging markets in general could form ideal hotbeds for nascent technology, by virtue of the fact that they’re virtually blank templates from a conventional power perspective.
In countries such as Nigeria or Kenya, the costs of developing energy storage for use with off-grid solar are likely to be comparable to the infrastructure bill for replicating the large, centralised, fossil-fuel powered grid model long established elsewhere.
In these markets, technology developers will undergo steep learning curves to cut costs and optimise their products. This could potentially eat into projected power demand, which is based on the idea that economic growth in the developing world will continue to require fossil fuels.
Moreover, if battery technology or compressed air storage is developed and established in these markets, and costs come down as a result, they could also begin to compete with the status quo in markets like Europe and the US.
Indeed, some experts believe the potential for cost-effective, sophisticated off-grid systems such as solar with battery technology could ultimately prove to be the biggest threat to gas-fired power – and even the centralised grid model in the developed world.
But it's not all bad news for traditional thermal power. The industry is convinced that gas will continue to play a role in providing flexibility to a centralised grid system, where it exists, for many years to come – it is just that gas will have to compete with other flexibility mechanisms in an increasingly competitive marketplace.
Disruption will take time and will be market specific. Gas-fired generators have plenty of time to adapt. The main challenge for the industry now is to try to understand where it fits into the energy landscape of the future – beyond simply being a “transition fuel”.
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