Shared Energy: Why Not?
It is no secret that resources are finite. For a global economy centered mainly on growth in a world where traditional energy resources (i.e. oil, natural gas) have volatile prices and limited supply, the question is whether or not this growth is sustainable. Over the long run, how can we marry our global economy’s need for energy with methods of sustainably producing it?
I had the opportunity to speak to a young energy systems engineer who specializes in sustainability. He fears that given the exponentially increasing rate at which we extract resources from the earth, we may not be far from reaching a limit.
As a resident of the Netherlands, Florijn de Graaf’s Government has set ambitious targets for renewable energy: decrease carbon emissions by 80% by the year 2050 from their 1990 levels, which he believes underestimates the role of fossil fuels in our current economy. With the European Union setting the goal for annual GDP growth at 3%, the sort of economic shrinkage such an ambitious target would require will no doubt be unwelcome.
Right now, explains de Graaf, the energy industry is centered around fuel, for which we do not yet have a sustainable alternative. Hydrogen, a possible alternative, is very inefficient to produce. For each unit of energy invested in hydrogen production, you only get between one and five units back. To give perspective on this inefficiency, this number can be higher than twenty units per unit invested in oil.
Without a sustainable alternative to gas, perhaps the answer is not a fuel, but another source of energy: electricity. De Graaf asserts that solar panels are becoming a very good investment. The price of solar panels dropped by 95% in the last few years, making it more and more attractive to institute projects centered around solar energy. One problem, however, is that the production of solar energy, and even wind energy, cannot be controlled: it depends purely on whether or not it is sunny or windy. Moreover, once the energy is produced, storing it becomes an issue.
The solution? Microgrids. These localized energy supply units can function as autonomous energy sources for small neighborhoods. Although ordinary Microgrids can incorporate diesel, the Smart Integrated Decentralized Energy (SIDE) system de Graaff favors only stores renewable energies. The benefits of SIDE technologies are numerous: they reduce the load of energy the current grid distribution network has to manage. Moreover, the energy from the system is kept locally. Typically, there are “peak” times, which is when energy consumption for a local area is at its highest, usually around mid-day. Since the SIDE system stores energy locally, it reduces this problem. For example, it might store the energy that you produced and did not use today and share it with your neighbor, who may not have produced enough to satisfy his energy needs for this particular day; however, when you may not have produced enough energy and your neighbor has produced a surplus, the excess energy is able to flow to your house, creating a balanced, cooperative system that reduces waste. These systems are owned by the locals who use them: a person who decides to become a contributor and a beneficiary of the SIDE system becomes more independent in terms of their energy needs and may even save money. We have always embraced the idea of recycling plastic and paper, so why not energy?
The SIDE system, however, does not come without its challenges. The biggest barrier, according to de Graaf, is in fact regulatory rather than technological. One of the regulatory issues relates to taxes: each house has energy meters that track how much energy is coming in in order to impose a tax on energy consumption. However, if locals end up engaging in a lot of energy trading through the SIDE system, the meters will just keep running and impose higher taxes than necessary.
The goal in the long run for engineers like de Graaf would be to reinvent the way in which we consume energy along “sociocratic” lines. Once people become the producers of their own energy, they are no longer dependent on large corporations, or even the government, for their energy needs. For those who may seem skeptical about such a system, the young engineer urges us to compare this idea to Uber or Airbnb. Both companies experienced rejection from investors in their early stages because few people believed that sharing your car or your house with a stranger was viable or even possible. Today, though, these companies have proven that there is a possibility for increased efficiency and profitability using the sharing economy. Paradoxically, they have shown that integrating socialist values may have the ability to serve capitalist goals.
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Written by Jeremy Kattan & Edited by Rachel Weissman & Alexander Fleiss