13 April 1892 saw the birth of Robert Watson-Watt, the inventor of radar, and descendant of Scottish inventor James Watt after whom the unit of power was named. Also on this day in 1960 the first satellite navigation system was launched and a decade later in 1970, the oxygen tanks on Apollo 13 exploded leading to one of the most extraordinary examples of innovation and resourcefulness ever seen. However my own personal favourite innovation associated with this day was in 1742 when Handel’s famous oratorio Messiah premiered in Dublin.

No-one denies that innovation is important, but it’s surprisingly difficult to achieve. This interesting article explains that in innovating we must be guided by possibilities and not experience, and literally figure it out as we go along. This is strongly counter to most people’s natural impulses, particularly when livelihoods can depend on the success or otherwise of the project.

“Pursuing your beliefs without data-driven validation may seem terrifying, but studies show that doing this actually increases the opioids in one’s brain, thereby causing a calming effect. It also stimulates reward pathways in one’s brain and boosts the production of dopamine — a neurotransmitter that helps us feel more comfortable about moving forward to become happier tinkerers.”

The energy sector is facing disruptive innovation on an unprecedented scale, generating opportunities for new entrants and threatening traditional business models. State-mandated de-carbonisation policies are driving unexpected changes:

#1 Decentralisation
he top disruptive trend is decentralisation as generation is increasingly connecting to distribution networks, by-passing the transmission system and disrupting network traffic in ways not previously seen. This presents multiple challenges to system operators who lack visibility over distribution-connected generation, much of which is intermittent. The past couple of weeks have seen unprecedented solar generation in the UK, almost all of which is connected to local networks.

#2 Storage
The costs of batteries is falling dramatically making large-scale deployment economically viable. There are challenges around business models, and the lack of a coherent regulatory framework, but it is more a question of when rather than if these issues will be resolved. Batteries provide an alternative to network reinforcement and is disruptive of traditional system operations.

#3 DSR
Large consumers are increasingly taking control of their usage, installing measuring devices which allow them to first understand and then control their consumption through load shifting to take advantage of cost benefits and providing turn-up and turn-down services to system operators. Aggregators are emerging to combine multiple loads in order to provide meaningful amounts of response to the grid, again impacting traditional grid management processes with the potential to replace reinforcement investments.

#4 Digitisation
Still in its infancy, the digitisation of energy has the potential to be hugely disruptive. As consumers of all sizes are able to measure and control usage at the appliance level, so load-shifting will become a daily activity for all users. How this activity is managed will drive the impact on both distribution and transmission systems, as will the degree to which small users begin to use domestic or community-based storage solutions.

#5 Electric vehicles
EV penetration is still small, inhibited in large part by the lack of charging infrastructure. Providing this infrastructure will be key to the large-scale deployment of EVs and will result in the installation of significant new flexible storage capacity in the EVs themselves, however it is a significant challenge for urban planners wanting to avoid the wide-scale disruption associated with laying new cabling under roads and pavements.

There is a high degree of consensus that these changes are coming. The challenge for innovative companies is to develop business models that enable them to earn a living in a market where the fundamental market structures have yet to adjust to the new realities. The challenge for policy-makers is to re-shape the regulatory environment to accommodate and encourage these innovations, without destroying the economics of important legacy systems.

Whether they can rise to these challenges (and avoid such policy cul-de-sacs as retail price caps) remains to be seen.

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