- Climate hub
- 19 Oct 2021
- 5 min read
The future of energy is coming to you
By Ben Fahy
Affordable, sustainable and flexible power
As industry disruption gathers pace, Innovator Rod Snodgrass says you need only look at telecommunications to see what might unfold.
Energy could be on track to be cheaper and more flexible - changing the way we live in decades to come. As technology has advanced, some of our everyday costs are significantly lower: we spend far less on clothing, furniture and consumer electronics than our parents did, and the price of power could be going in the same direction.
And think about the way the telecommunications industry has changed, says Rod Snodgrass, the founder of the Exponential Agency and a veteran of the telecommunications and energy industries. In the mid ‘90s, when he worked at Xtra, there was a time when it cost $7.95 an hour for very slow dial-up internet and Telecom made most of its money through voice calls and texts. Now, consumers can get unlimited data, calls and texts on their smartphone for $59 a month; we can do video calls for free; and we can stream content from a variety of providers for much less than a Sky subscription.
“In the past, to get internet access, you needed a $300 a modem that you plugged into the side of your computer. Now it’s called a sim card and it costs 2c,” says Snodgrass. “The speed of the internet is 40,000 times faster than it was 20 years ago. Imagine your current energy bill divided by 40,000. That’s about 1c per month.”
Your car could become a home battery
From the roof to the garage: cars are one of the least productive assets we will ever own - and they pollute our environment. They generally sit unused for 94% of their life but Snodgrass believes you will be able to use your car to defray your energy costs.
“That’s the bit that people haven’t grasped yet,” he says. Just as the internet is a two-way network where content is created and also delivered, in future you could charge your car cheaply at work, at the supermarket, or with solar during the day and you could theoretically power your house with that energy. The average home in New Zealand uses three kilowatts of electricity per hour. Some car batteries are already 80kw and they’re getting bigger and better.
“Do the numbers. That could run your home for a day.”
Further into the future, just as the smartphone was the catalyst for a shift from fixed wires to mobile data - and for a raft of innovations that offer consumers more utility at much lower prices - he believes the catalyst for a major change to the way we use energy will be the autonomous electric car.
When they’re taken up en masse, possibly in around 20 years, we will have all these devices roaming around our urban areas that are smart and aware, have big batteries and will be able to move people, data, goods and even energy more efficiently. And just as we have started to rent our music through Spotify, rent our shows through streaming platforms or rent our holiday homes through Airbnb, he doesn’t think we will need to own our own cars. “Why would you own one if you can’t steer it?”.
These cars will return somewhere to dock and charge when they’re not being used rather than parking on the street and they’ll travel so closely together that you won’t need as many motorways. When you consider that 25% of our cities are dedicated to parking and roads, he says this innovation will lead to more productivity, cleaner air and property price reductions as land is released.
As we’ve seen with electric cars, where 72% of all new cars sold in Norway in August were electric (the Government there has a goal of getting to 100% by 2025 and has offered significant incentives to do it), the more people that adopt the technology, the more the costs reduce.
“It will be an S curve and will probably start later than anyone thinks and then go faster than anyone expects. Remember the internet was disappointing for a long time.”
Delivering power to where it’s needed most
While it’s often hard to predict which technologies will win, there are plenty of signals to look for and one of the big ones is the current levels of investment. At present, huge amounts of capital are going into renewables - and particularly solar - and electric cars.
“Tesla is the most valuable car company in the world now and all the major manufacturers are committed to electrification. This shows where things are headed.”
So, what does all this change mean for New Zealand’s big power companies?
The Climate Change Commission has estimated we will require 47% more renewable generation in the next 15 years as we shift away from fossil fuels and electrify our economy. We will still rely on our existing renewable generation and the expertise and capital of large-scale generators to provide a lot of that additional capacity and storage.
Big industrial users require huge amounts of electricity that solar and wind can’t provide, but Snodgrass believes it’s about finding the network of best fit. Megabytes can be sent to the right places at the most efficient prices. A ‘kilowatts of best fit’ model would mean that in some cases it will be hydro sent from the South Island through the grid, but in other cases it may be from solar or wind generation stored in the North Island.
It might not be free, but he predicts electricity will become much cheaper, more efficient and much smarter and he firmly believes the conditions are right for the power to start moving to the consumer – sometimes quite literally.
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