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11 May 2018

The in-home electricity-only energy future needs gas to die or be killed

Coal is essentially in its death-spiral, and nuclear is still struggling with public perception, but natural gas is still the largest barrier to wholesale adoption of battery storage and associated smart grid technologies. Gas needs to die for the smart grid to truly thrive, but it shows no real signs of slowing down – both for in-home heating and cooking use and for utility-scale electricity generation. Gas has never been cheaper, and that’s why it is displacing coal.

Sure, one can make a gas supply chain smart, and significantly improve its end-to-end efficiency in doing so, but gas isn’t a medium that enables things like battery storage or electric vehicles – because in the home at least, you want to be using electricity not gas for that. While the electricity used for those types of application may itself come from burning gas, that electricity could be coming from cleaner sources of energy – namely, solar and wind.

Environmental issues are becoming an increasingly important issue for politicians, as younger demographics place more emphasis on being green when weighing up candidates. As such, we expect to see more political support given for electrification programs that would enable smarter grids. However, those green-leanings are going to run into major problems when they start trying to convince households to part ways with their gas boilers and cooking appliances.

The issue is that as long as gas is used for heating water, home builders will nearly always choose a gas-based system, due to the perception that electric boilers are not fit for purpose. It’s an outdated view, but one that is reinforced by consumers – many of whom are put off by the electric versions. With cooking, gas burner rings have been much nicer to use than the old electric hobs, but newer induction technologies are now challenging gas performance.

New technologies like air and ground source heat pumps can provide more energy efficient performance for space and water heating than gas-powered systems, and also benefit from not having to have a potentially dangerous gas supply within the home. They do, however, require a more air-tight design, but modern regulations are better at enforcing this, and retrofitting a home is not too hard. There’s also some examples of gas cooking setting off smart home air quality sensors – something that an electric version shouldn’t do.

But pressuring new-builds to adopt the new electrified technologies isn’t going to have enough of an impact. These builders and contractors are usually very set in their ways. They want to make sure that what they install the first time will not require another visit to fix, or worse, result in an unhappy customer. Should the market come to value such electrified technologies, this could incentivize the homebuilders to include them in their designs, but that sounds like an uphill battle.

From the top-down perspective, no government is going to mandate the removal of gas systems from existing homes, and the ‘used’ home market stock would carry on almost indefinitely using gas until a market priced it out or shut up shop.

Regulations and requirements that mandate solar panels or batteries in new homes similarly don’t solve the problem of the existing gas deployment. The only real market-based incentive for in-home electrification would be additional taxes on gas, to raise the price so that electricity becomes the more desirable alternative. Such a tax won’t be popular, especially if the cost-burden of switching to electricity still rests with the home-owner or landlord.

Another problem for gas is that you can’t perform the same sorts of fancy analytics on its consumption as you can with electricity. Add-on systems like Verv’s can identify the types of devices in a home via their usage of electricity, and in time, the electricity meters themselves will be able to facilitate that too. However, with gas and water, you can only really measure flow and perhaps waste – with the ability to potentially spot leaks too.

There’s also the question of the amount of space needed to install new technologies within the home. The battery units required to provide demand-response and time-shifting are not exactly small, and also require extra inverters and power cabinets. If you want to add a water tank to act as an additional energy storage mechanism, you have to convince the home owner to give up a storage closet or space in a garage in order to accommodate the tank or battery. In smaller homes and apartments, that’s a tough sell.

But there is now a clear path to the complete electrification of a home that was not as clear a decade ago. At scale, residential energy usage could be transformed into a much more environmentally friendly model, and one that can provide more nationally self-sufficient power reserves, thanks to rooftop solar and wind turbines.

A government might realize the value that comes from not being so beholden to global trends in energy prices, and could use that as a means of promoting in-home electrification as a means to an end. With sufficient motivation, a country should be able to source most of its needs through solar panels and wind, but that will require big investments in storage technologies. Some nations have better access to hydroelectric and geothermal resources too, but not all can pull gas or coal from the ground should they find that global prices surge upwards.

However, commercial and industrial systems currently have requirements that outstrip what can be feasibly supplied by things like ground source heat pumps. Electrifying a home is a much easier feat than electrifying a production line, especially when heating water is brought into the mix.

Over time, a home could be islanded, that is, cut off from the grid and derive its power requirements from its own solar panels, perhaps using a connection to the grid for re-selling excess solar generation and for emergencies. But it is much harder to see entire factories achieving that same sort of architecture. Due to this, there will still be needs for grid-scale generation, or at least aggregation, that can feed gigawatts of power to industrial applications.