Will decarbonized, decentralized and digitalized energy futures create fair futures?
In line with the sustainable development goal on energy, SDG#7, the World Energy Council (WEC) defines energy sustainability based on three core pillars: energy security, energy equity and environmental sustainability. The challenge of balancing these three goals, which often come one at the expense of the other, is what constitutes the ‘energy trilemma’.
According to the WEC, balanced energy systems enable prosperity and competitiveness of countries and are therefore desirable. The ‘trilemma index’ is the tool used by the WEC to analyse and rank countries’ performances on the various trilemma aspects. However, existing ‘traditional’ energy systems are going through fundamental changes, bringing forward new types of dilemmas and trade-offs that are often hard to envisage and which are not addressed by existing trilemma frameworks.
Traditional vs future energy systems
While traditional electricity systems are highly regulated, characterised by large fossil fuel (or nuclear)-based power plants and managed by big utilities, future energy systems will be renewable-rich, decentralised, digitalised, more liberalised and less regulated, with multiple suppliers and stakeholders. Decarbonised, decentralised and digitalised (DDD) energy futures will also include companies with new and innovative payment approaches and business models, and new features such as prosumer markets, peer-2-peer trading, grid-connected microgrids, virtual power plants (VPP), electric vehicles (EVs) with vehicle-to-grid (V2G) connection, energy service companies (ESCOs), dynamic pricing, real time demand response programs, and many more. Further reductions in the cost of solar PV panels and storage technologies are likely to accelerate this process, creating new and unfamiliar electricity markets that involve new types of actors with diverse self-serving interests, new roles for demand side, and new governance structures.
The DDD energy trilemma
Future DDD energy systems are often portrayed in the literature as the solution to the energy trilemma, and perceived not only as cost-effective and efficient, but also ‘democratic’, ‘fair’ and ‘just’, more resilient and secure, and environmentally sustainable. Yet, trade-offs and contradictions between different clean and local energy generation goals are inherent to DDD energy systems. For example, conflicts between the use of land for renewable electricity generation vs. the provisioning of ecosystem services, or the trade-offs between low carbon electricity vs. high volume of PV waste and toxic battery waste. Furthermore, the emerging energy markets create new types of resource dependency and new power relations between countries (never mind the slavery that is rife within some resource-rich countries mining and processing the materials needed for DDD energy systems). Essentially, fossil fuel dependencies are replaced by other resource dependencies, such as materials for distributed generation technologies or minerals for storage. These, in turn, pose new threats to energy resilience and security.
Equity, fairness and DDD systems
DDD electricity systems and markets, allegedly, could be more equitable, fair and democratic in terms of the general public’s ability to influence the markets, participate as generators and become prosumers. However, DDD systems might negatively impact equity and fairness as well. For example, resources and people’s ability to participate could be bounded by socio-economic parameters and geography and, while costs are expected to decline further, installing PV systems or batteries will probably still be unaffordable to many in the future, and will remain unsuitable for that large portion of society who live in high-rise buildings, or to those countries lacking sufficient renewable resources. Even valuable resources for DDD systems, such as demand-side flexibility, seemingly more evenly spread in society because they are not as costly as PV or storage, are often, in reality, unevenly spread between rich and poor, raising a concern about ‘flexibility justice’. For example, at a system level, an increase of electricity self-sufficiency and prosumerism could lead to ‘grid defection’ of the rich, leaving the economic burden of upgrading and maintaining an expensive grid to poorer segments of society.
Given all these challenges, the assumptions and assertions made about the multiple benefits to society of renewable-rich DDD systems need to be critically evaluated, and the measures used to assess them should move away from the criteria (and indexes) that suit fossil fuel based, centralized systems to using criteria that focus on energy services and identify the emerging trade-offs that are typical to DDD systems.
Banner photo credit: Rico Reutimann on Unsplash
