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An introduction to Distributed Energy

  • Market Insight 23 November 2021 23 November 2021
  • Resilience

The global energy industry is moving through a highly undulating period, transitioning through decentralisation towards localised energy sources. With a perpetually growing focus on sustainable energy, novel technologies involving electric vehicles are placing heightened pressure on longstanding energy infrastructures the world over. As a consequence, businesses are searching for alternative sources of energy and, specifically, sources that are more economically attractive, flexible in their distribution and, of course, environmentally conscious. The progressions and innovation in the energy sector, facilitated by industrial-scale digitisation and energy technology, have offered up a solution, Distributed Energy (DE).

An introduction to  Distributed Energy

The transition to Distributed Energy

Over the past century, the growth in both population and economics have considerably hastened the global consumption of energy and electricity to an unprecedented volume, with nearly 30% of global energy consumption being used by buildings alone. The International Energy Agency has predicted that, by 2035, the annual requisite investment for the supply of energy to meet global demands will rise to approximately $2 trillion per annum.

In order to handle these rapidly inflating costs, progressions in both smart meter technology and energy storage are bolstering opportunities towards a decentralised approach for energy management, namely, DE. DE involves a small-scale unit of power generation operating locally whilst being connected to larger power grids at the network distribution level, and the energy is utilised close to the source. Energies used involve any of the following: solar, small natural gas-fuelled generators, electric vehicles, such as HVAC systems and electric water heaters. DE also covers a diverse range of solutions, including energy efficiency, monitoring and on-site generation. All of these solutions help business and organisations that require a larger volume of electricity to take control of their energy and harness it for a commercial opportunity.

The growing access to and obtainability of renewable energy sources, smart meter tech, and climate-induced regulation and policy facilitating net zero and a restriction on energy consumption, are all instigating the transition through a fluctuating energy landscape from a traditional centralised energy supply chain to dynamic energy supply chains involving multiple stakeholders and multi-layered energy sources through DE. However, even though there has been considerable debate and discussion over the last decade in regard to the potential of energy efficiency and smart energy, including DE, there have been few breakthroughs in making a clear case for these solutions.

Looking to the coming years

With both the arrival and growth of DE, a viable source of decentralised community-generated energy and its two-way flow of power, it is transforming the grid. Now that consumers and corporates alike are pushing for a greener society, coupled with more affordable energy, it seems likely that alternative sources of decentralised DE are going to become increasingly popular in the coming years. As DE is a highly economic energy solution, and relatively easy to integrate, it offers businesses the opportunity to harness greater control and awareness of their power supply, whilst making greener energy solutions more accessible to businesses, prosumers and consumers. What this transition highlights is that companies are privy to the numerous benefits of converting from energy clients to energy creators by way of alternative energy solutions, such as DE.

Prior to the UN’s COP26 in Glasgow, governments around the world promised a “green recovery” from Covid-19. Now that the historic COP26 has come and gone, with governments, policymakers and industry leaders alike pledging their climate commitments, only time will tell if DE will take a firm grasp of the opportunities laid forth by this energy transition to become a more centrally used source of energy generation, or whether it will continue to act as an alternative, decentralised source of energy that is stifled by a lacking regulatory environment.

Article – “An introduction to Distributed Energy”

In the attached PDF article, we align our sights on to Distributed Energy to provide an insight and overview into what DE actually involves, its merits and shortcomings, the key DE industry players and projects, and the likely developments in the realm of DE in both the short and long term.

Download here


Additional authors:

Paralegal Conor Macaire Duncan, Associate Harry Little and Trainee Sachin Shah

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