Will mainstream developments go off-grid?

With changes in technology and the way network charges for electricity are paid, could we see in the near future developments going “off grid”? By off-grid I don’t mean a commune in the hillside, but more the standard mixed-use development that can produce energy for its users without connecting to the grid.

Up to now they have been impractical due to the fact that energy generation on-site is more expensive, energy demand fluctuates too much (daily and seasonally) for typically intermittent renewable energy, and on-site energy storage has not yet taken off. Besides, why would you want to be off-grid? You lose the reliability of the grid, everything becomes more complex, and the grid is decarbonising so fast it is a low-carbon option.

One answer is that on-site generation and nascent energy storage has become a lot cheaper, along with the fact that it is becoming easier to manage our energy demand and move it around to suit generation. This means new developments can be designed to have essentially no heating required, apart from hot water so that the fluctuations in thermal demand can be largely eliminated.

On the generation side, solar hot water and power are obvious choices but don’t work in the winter so we may need inter-seasonal storage. Wind/hydro will work on some niche sites. Hot water and power gas CHP is no longer an option due to the high CO₂ emissions and air quality issues. A potential replacement could be hydrogen fuel cells, which generate power and heat just as conventional CHP engines do but without emitting any air pollution and, (assuming the hydrogen has been generated from renewable energy) are zero carbon. They can be part of a genuinely “zero emission development” or it may even be practical/required to use some small generators as back-up power for occasional use

Energy storage technology, particularly in the form of batteries, is advancing rapidly and will soon be cost-effective for the daily management of energy demand. The inter-seasonal issue (how do we take energy generated in June and use it in January?) is more difficult, although in my opinion hydrogen offers the best opportunity because it could be used in large scale power stations but also on-site, as mentioned above. Importantly, demand side management is now a maturing “technology”; buildings are reducing energy demand at certain times to support the grid and they could also do the same for single sites.

A change in charging

The way network/grid charges are passed on to consumers is due to change in 2018. At present in most areas non-domestic customers pay DUoS (Distribution Use of System) on top of the cost of the electricity they are buying. These are split into green, amber and red time bands. The idea is to encourage customers to reduce demand at periods of high demand (weekday evenings) and the difference in price is substantial; in South Wales the price in the green band period is 0.1p per kWh and in red bands is 12.6p per kWh. Large energy users often have strategies in place to reduce their demand in these periods, but the advent of energy storage and advanced demand management are turbo-charging this and making it possible for smaller users to do the same.

From 2018 the differential between these time bands will reduce markedly with green bands becoming more expensive and red bands becoming less expensive. Ostensibly this is to better reflect the cost of power distribution. However, this could be the first sign that energy storage and demand management are a threat to the status quo because the change will mean that in future the benefit for switching demand to green bands will be reduced. Although this should protect network operators for now it will increase costs for non-domestic end users. This will ultimately tip the balance (if only slightly) in favour of being off-grid.

It would still be a move driven by more than just economics at the moment but I wonder for how long?

Barny Evans is environmental associate director for WSP | Parsons Brinckerhoff