Structure of a Local Energy Company

A balance between production and consumption of energy, though ideal, is very hard to achieve in reality.

Last update on 09 May 2022
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Plans for the development of sustainable neighborhoods include new-building projects which are more or less self-sustaining in the energy demand for heating (and cooling). These local initiatives are successful, cost effective, and environmentally sound. This principle, which mainly focuses on heating and cooling of the district, can also be used for supply of electricity. Using wind and solar power, it is possible to start a small utility company. The implementation of a power variation is a major challenge. The current infrastructure is not efficient for local networks, and history appears to repeat itself: a second War of Currents is taking place.

DC Wheel

AC vs DC voltage losses compared

Edison was a proponent of DC, and as early as in the end of 1800, he already saw the benefits of an efficient energy transportation. Since conversion was a problem, the choice fell upon the model of Tesla, namely alternating current (AC). Back then, AC was the right choice. However, with the upcoming use of electronics - mainly working on direct current (DC) - the situation has considerably changed. And since renewable energy sources mainly produce DC, we are forced to revise our electricity infrastructure and we must consider a phased transition to DC.

The parallel with the internet is a good example to show how to use energy efficiently. In the beginning, the earning flow was based on data transportation combined with usage time. Internet costs were billed monthly based on minutes on the phone. Energy companies still work in this structure. The success of the internet is partly determined by the use of a new settlement model in which the emphasis was no longer on minutes, but rather on providing the infrastructure (fiber optics). Government and energy companies should seriously think about this principle in order to manage and sell renewable energy. We should also consider the reintroduction of common local energy companies (GEB.2) owned by the energy generators such as the residents of a neighborhood. In this model, the electricity network has a local structure, and then it will not matter whether the electric car is being charged in a parking lot or at the door of one’s home. Residents of apartment buildings can recharge their cars with collectively generated energy by their own charging utility.

Due to the impending shortage of fossil fuels, and the resulting rise of renewable energy, direct current is an obvious solution.

  • DC is a democratic system: the monopoly of the energy companies is getting smaller and direct cooperation between producers and consumers via a joint energy company becomes possible. Not only the producer, but also the consumer will have a greater part in their own say and insight into their own energy system.
  • System equivalence: people with their own charging point at the front door, as well as people without one, will have the same capabilities and energy costs. Even residents of apartment buildings will have their own charging point and will be charging through their own charging utility. The private utility and the energy usage utility will remain separated though. This is to guarantee the privacy of the consumer.
  • DC makes it possible for energy, especially renewable energy, to be fully used, because the most efficient transfer takes place between source and load without unnecessary conversions.
  • DC ensures that the CO2 targets are achieved immediately, as switching to DC yields extra energy through reduced transportation and revenue losses. In addition to this, by reducing the use of resources, including circa 20% copper reduction, DC will indirectly have an immediate effect on lowering CO2 emissions.
  • By generating their own energy and the insight of their private consumption, the consumers become energy-conscious. The profits of delivering back surplus generated energy will add an extra incentive to awareness of the producer/consumer in dealing with energy.
  • DC drives knowledge innovation and improves the image of technical education in the energy market.
  • With DC, the cost price of energy will be ultimately determined by the infrastructure and no longer by the consumption. This is similar to the internet: the consumption lies in your hands, the infrastructure comes from the government.
  • DC makes it possible to invest functional in infrastructure and not in emergency solutions, as is currently done by mega-investments.
  • DC reduces horizontal pollution: Pylons which are currently disturbing the landscape will be redundant with DC. By eliminating these masts, valuable land will be made available for housing and recreation.
  • DC has less impact on health.

Recommendations

In the current energy climate, the following points are important:

  • Regulations and standards must be prepared or revised.
  • Permits must be granted to groups of users who want to connect to a shared network. The government should give permission to districts, which collectively invest in renewable energy, allowing them to build their own energy grid and to manage it through a local, common energy company (GEB.2).
  • The government should bring together more technical people from different disciplines with substantive knowledge in order to objectively advise the directors in taking decisions on energy.
  • An innovative way of thinking must be developed in the world of energy and electricity. Challenging solutions should be better viewed, and the grant process for innovation should be less cumbersome and more accessible to small businesses.
  • It is important that the government retains ownership of all network infrastructures to maintain its monitoring role, and to avoid possible abuse and monopoly formation.
  • Energy consumption should be directly settled and not through taxes and other charges (including European grants and government support for power plants). The compensatory measures of the government to large consumers of energy should also come to an end, as this gives rise to unfair competition between sustainable and unsustainable solutions, which in turn obstructs innovation.
  • The government should arrange for accelerated depreciation of investments in renewable sources as and when possible. This will be an accelerating effect on the introduction and replacement of new sustainable technologies.