About Nesta

Nesta is an innovation foundation. For us, innovation means turning bold ideas into reality and changing lives for the better. We use our expertise, skills and funding in areas where there are big challenges facing society.

As Alex Ferguson would say, it’s “squeaky bum time” in the energy industry.

The headlines are dire, with warnings of blackouts across the national grid where, uncomfortably, we’re not entirely sure how much spare capacity we have. But if Fergie were a power system engineer, he’d be equally sweating the local grid, where the picture is less clear.

Traditionally, we’ve not had to worry on this front—consumers turned on their lights, ate dinner and watched TV at the same time, making it pretty easy to work out when electricity was needed. But the rise of electric vehicles (EVs) and impending arrival of electric heating changes all that. It puts more pressure on the local cables where, if too many neighbours plug in their shiny new Teslas, things can go south even if the national picture is rosy.

The traditional answer is to dig up the road and put in a bigger wire, which is expensive and disruptive. But technology, and the increasing amounts of energy storage capacity in a typical home, are giving us new ways to answer the question.

A fully charged EV on the drive contains around eight days’ worth of electricity for the average household. That will change as we electrify heating, but it gives you an idea of the scale of the storage coming to a parking space near you. This means that, in the near-ish future, the UK’s energy isn’t necessarily going to be where you think it is. A relatively small town could potentially have more kerbside power than a major nuclear plant can kick out in an hour.

It’s clear that local power will be a major part of an efficient and resilient system.

Add to this solar panels, as well as local and affordable home batteries, and it’s clear that local power will be a major part of an efficient and resilient system.

The exciting potential is there; but the boring stuff isn’t.

The first change required is to the rules. We need interoperable standards, agreed with generators, network operators and technology manufacturers (including the car industry). This includes communications standards so that batteries and other equipment can chat like servers on a mini-energy internet. We can then move on the second change: incentivising consumers to play the game.

There is money to be saved here, sizeable sums from reducing grid upgrade costs that could be repurposed to incentivise early adopters instead. But the real win is going to be from working with the private sector to develop the consumer-facing deals that make people want to take part in this energy transfer market—plugging their home or car into the community grid. That might entail cheaper bills, getting paid to generate energy or peer-to-peer trading. Government and industry need to test these solutions together, until we find one that scores.

This article was originally published as part of Minister for the Future in partnership with Prospect. Illustrations by Ian Morris. You can read the original feature on the Prospect website.