Updated: Oct 24, 2022
Dr Martin Belusko discusses the need for flexibility in planning in a changing energy system
Once a commitment to decarbonise and transition has been made, the temptation is to develop a detailed plan in the belief that this will be orderly and predictable. What is clear regarding energy over the past 50 years, is that a static plan will not work. A dynamic strategy, adapting to the continuous changes in the energy system.
Implicit but often not well understood is the fact that fossil fuel is not what makes our energy, but the overarching energy system that uses this fuel. Renewable energy technology uses solar and wind energy within its own energy system. This new energy system is distributed, modular and CAPEX driven, fundamentally different to a centralised and OPEX driven fossil fuel system. It is these features that represent an attractive value proposition delivering a lower cost and more reliable electricity grid.
However, there are practical, technical and financial challenges, which the electricity industry is responding to, and customers need to recognise. Therefore a plan made today is not relevant in 5-10 years, as the energy system will be different.
This new energy system changes the way we think about energy. If the renewable energy is for “free” then wasting energy and being energy efficient is less important. Furthermore, its not how much energy is needed but when it is needed that becomes more an issue. Fundamentally, the decision around an investment is still characterised by a techno-economic evaluation, however the scope of that analysis has changed. For example, installing more on-site solar PV with a less efficient air conditioning system, may prove more cost effective than just installing a very efficient air conditioning system, particularly if solar electricity production occurs when air conditioning demand is high.
Proactively engaging with the renewable energy system enables customers substantial opportunity to reduce and control costs over the long term. Different technologies such as heat pumps have different characteristics to achieve an optimal solution when operating with renewable energy. This requires adopting the right technology in the right way, at the right time within a strategy. Key to this approach is appreciating the technology life cycle of various solutions, as well as the existing equipment life and future production plans of your facility. For example, if you have just purchased a gas oven, then clearly this will not be replaced today but a series of decisions can be made to achieve a decarbonised solution, which will be different if this decision is made in 5-10 years.
It is through understanding not just what different renewable energy or energy efficient technology but when this is needed. Developing a strategy that enables key decision points to be reached tailored to your facility is what is needed. This approach provides the scope to define the type of decision and the choices for that decision. This roadmap provides the framework for a robust pathway to genuinely go from where you are today to a rationale decarbonised facility in the future.
The Mondial technical team, made up of Dr Rhys Jacob, Dr Ming Liu and Ross Flewell-Smith hold the knowledge and expertise to truly help transition your business.