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The Power of the Home

  • avatar
    Ben James
  • avatar
    Archy de Berker
    Co-founder @ Axle
  • avatar
    Karl Bach
    Co-founder @ Axle

Renewable power is now the cheapest electricity in history - but only when it’s sunny and windy. The biggest bottleneck to scaling renewables is no longer capital or technology. It’s the grid’s ability to cope with an intermittent supply of electricity.

Fortuitously, the missing puzzle piece is falling into place as we speak. At the same time as building renewables, we are deploying an army of grid-stabilisers, in the form of EV chargers, heat pumps and home batteries.

In this piece, we set out our vision for a future energy system built upon the power of the home.

It's a story in three parts.

1. Electrification

Today, most western households have three energy sources:

  1. Petrol or diesel for transport,
  2. Gas or oil for heating,
  3. Electricity for appliances and cooling.

But very soon, homes will use electricity for all three, courtesy of EVs and heat pumps.

This is inevitable, because electrified homes are a) cleaner, b) better, and increasingly c) cheaper. The cost of batteries, EVs and solar is plummeting every year. The electrification train has left the station, and it’s a speedy one.

PV and battery cost curves

We’re going to need a lot more electricity.

As we electrify, we’ll consume less energy via liquid fuels and gas, and more energy via electricity. This is a big win for the climate: if we can decarbonize electricity, we’ve decarbonized the economy.

UK domestic electricity demand

Today, electricity is 20% of energy demand, but by 2050 it will be more than 60%. That’ll take electricity consumption to more than twice today’s levels.

2. Our bottleneck: the grid

Whilst renewables mean that power generation is getting cheaper than ever, delivering the power to end users is getting more expensive.

The first problem is the physical infrastructure. Each component of the grid - every wire, transformer, and substation - has traditionally been built to match peak demand.

As peak demand grows, we have to upgrade the grid to cope.

Additionally, the cost of balancing the grid is growing exponentially. Balancing is the job of the grid operator, who is responsible for ensuring that supply matches demand. They instruct generators to turn up or down at the last minute, to ensure that the system is instantaneously in balance. The grid operator is the conductor: trying to keep the orchestra in time, maintain harmony, and prevent the guy with the cymbals from ruining everything.

What started as a light-touch way to tune the system is now becoming more heavy handed, as the grid operator struggles to integrate intermittent renewables with growing demand. Today, we’re reliant upon expensive and dirty gas power plants, which balance the grid by rapidly ramping up and down.

At first glance, this seems pretty worrying. Will adding millions of EVs and heat pumps swell peak demand and cripple the grid?

3. The Power of the Home

We have good news.

EVs and heat pumps are not the problem, they are the solution. They are not additional demand that must be balanced - they are the balancing.

That’s because unlike most of today’s electricity demand, EVs and heat pumps are flexible.

  • It does not matter when EVs are charged, as long as they charged when users need them
  • It does not matter when heat pumps are switched on, as long as their users are warm when they’re at home.
UK flex demand

This means that EVs and heat pumps can consume electricity when it’s at its cheapest and greenest.

This solves both of the problems with our future grid:

(1) Instead of adding to peak demand, flexible devices will use energy intelligently, avoiding the peak. We can put more energy through the same wires.

(2) Millions of flexible devices can respond in real time to help balance the grid.

To be clear: residential flexibility will not just be a tacked-on nice-to-have that occasionally helps balance the grid, it will be the defining way that our future energy system matches supply and demand.

  • Instead of relying on a few huge gas power plants that are centralised points of failure, millions of devices will react in real time.
  • Instead of paying wind turbines to turn off when there’s too much energy (in the UK, we spend £billions a year doing this), millions of homes automatically absorb excess energy from wind and solar.
  • Instead of balancing the grid using imported fossil fuels whose prices could spike at any time, we balance the grid with modern technology.

This won’t happen by default.

Home energy flexibility provides the cheapest and most resilient future for energy consumers. And yet, this future is far from secure. The energy industry moves slowly and has only just upgraded from Windows 95. If we want a radically different grid, we need to build it.

So that’s what we’re doing: creating the backbone of the future energy system. One that harnesses the power of millions of distributed assets to balance the grid without fossil fuels.

We connect individual EVs, heat pumps and batteries to flexibility markets - optimising their demand and paying their users for doing so. We already orchestrate thousands of home devices, responding to grid requirements and price signals automatically.

We’re also hiring. If you like moving fast, and you want to work on the biggest bottleneck to decarbonisation, join us!