Why the energy revolution starts at home
by Carl Bayliss, Centrica’s Vice President, Mobility & Home Energy Management
The race to reduce CO2 emissions to net zero is on. Earlier this year the UK became the first major economy to pass a law to end its contribution to global warming by 2050.
A major factor in reaching the net-zero target will be UK households’ management of their energy use.
Fortunately, digital technology is making this easier by the day.
Artificial Intelligence, for example, can play a key part in managing home energy demand. Smart hot water systems can learn to heat up only when customers need them - the energy savings from this would be the equivalent of adding a whole new power plant to the grid.
It will also give consumers more choice in how they use their energy, such as allowing them to use electric vehicles as mobile energy storage for their homes.
Carl Bayliss, Centrica’s Vice President, Mobility & Home Energy, tells us more about the future of energy in the home.
Where is the biggest scope for change in the energy market?
Carl Bayliss: Homes are responsible for a quarter of all energy use in the EU. To reduce emissions, households will need to actively manage their own energy needs, possibly by generating and storing some of their own electricity. That means more solar PV and batteries.
To make sure we get the most out of those technologies, we need markets that are flexible and reward local, low-carbon systems. Trading electricity within communities could even replace centralised power generation.
And it isn’t just about electricity. Heating makes up a large proportion of domestic energy use. Alongside better insulation, government targets for zero CO2 emissions by 2050 will likely force a move away from gas, towards things like heat pumps and potentially the use of hydrogen as an alternative to natural gas.
Could EVs play a role in home energy management?
Carl Bayliss: It’s all about giving consumers a choice. At certain times of day, it might be cheaper to power their house using energy – which they’ve already paid for – from the car parked outside rather than from the grid. The technology’s already here, so it’s not a case of how it’s developed. The question is, how do we make this work, and how will it benefit everyone?
Are there any examples of countries leading the way?
Carl Bayliss: The Netherlands has introduced measures aimed at making its economy nearly carbon neutral by 2050. As part of that, new housing developments must be independent of the gas grid, and no gas infrastructure can be built in new residential areas.
Municipalities have also been given the go-ahead to decide the local energy supply, which is resulting in neighbourhoods being disconnected from the grid. This has seen an increase in demand for heat pumps. Ideally these should be deployed alongside solar PV and batteries, so that they don’t just start taking more electricity from the grid.
An increase in tax refund subsidies for solar panels has helped drive domestic solar installations, covering 21% of the total installed cost. That shows how important the right policies can be.
What kind of incentives are needed to get consumers on board?
Carl Bayliss: Consumers demand reliable, affordable energy. The cost of renewables has dropped dramatically – the price of solar panels has fallen by more than 80% since 2009, onshore wind electricity costs have dropped by a quarter, and wind turbine prices generally have fallen by half.
As platforms allow us to extract more value from the renewable energy being generated, the market is likely to continue to grow, and more people will be generating their own power. At the moment, there is often little or no financial incentive for people to store the energy they generate, which has meant a slow uptake of batteries and other storage systems. It can often be worth more money to export the electricity straight back into the grid. New incentives that reward people for storing and using the energy they generate themselves will help local markets flourish.
How is Centrica preparing for this change?
Carl Bayliss: By focusing on the changing customer needs and the technologies that will complement the transition to a net zero home. We are participating in the building of new homes, with projects that explore energy at a community level and the elements that combine to provide a new way to manage energy requirements.
And testing new hardware for existing households is just as important, so we’re continuing to develop our expertise in evolving today’s homes for the world of tomorrow. Regardless of the building’s design or age, an intelligent and intuitive energy management system is crucial, and we are continuing the work to bring together the applications that serve the needs of customers in this energy revolution.