Corporates – running away or running towards the grid?
Self-generation by some of the world’s largest energy users could be disruptive for the energy industry…but maybe in a good way, according to the latest research and debate.
Those inside the energy sector are probably familiar with the scale of power usage by some of the world’s largest corporates, but it’s worth re-stating.
According to Drax, crypto-currency company, Blockchain, is predicted to need the same amount of power as the whole of Denmark, just to run its datacentres by 2020! In fact, according to Drax, global datacentre demand is already taking some three percent of the world’s electricity supply.
For many of these power-hungry organisations, self-generation is becoming the obvious solution, potentially taking them off-grid and with the obvious implications for the utility retailers.
In their analysis of this rapidly developing situation in Utility Week, CapGemini’s Alain Bollack and Hessam Badamchi describe these self-generators as “Grid Runaways”. They highlight Microsoft as one of the leaders in the race for self-generation, while Drax also cites Apple and IKEA amongst the big names using renewable energy to power their own businesses.
The CapGemini team acknowledge that that promotion and culture plays a part in this development, but state that the primary driver for Grid Runaways is, unsurprisingly, cost benefit. The reduction in wind and solar generation, coupled with a significant fall in the cost of battery storage, make self-generation an increasingly compelling business case for many organisations.
Their analysis does, however, highlight a new role for energy retailers, given that Grid Runaways will certainly impact volume energy sales and, consequently, revenues.
As part of their recommendations to find alternative revenue streams while managing costs, they suggest utilities have a role as “trusted intermediaries” and providers of smart energy management systems to the self-generators. At the same time a “zero-based”, cost-conscious culture is also needed.
Meanwhile, Drax highlights the benefits of the Grid Runaways helping to support overall demand by putting electricity back into the grid at peak consumer times, but when their companies’ own needs are low.
Most importantly, Drax warns the self-generators not to lose sight of their core businesses in the rush to save energy costs, stating that partnering with energy suppliers to manage and distribute their electricity is a sensible and realistic approach.