A Decentralized Pathway for an Energy Secure and Low-Carbon World
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A decentralized energy system is where source is located closer to the demand center. At Reon, we believe that decentralized energy systems offer a range of financial, technological and societal benefits.
Decentralization in energy isn’t a new concept. The founders of electrical systems including Thomas Edison started with Decentralized systems in late 19th century.
1900 onwards was the age of private power companies using DC microgrids to deliver power to their customers as can be seen in the picture below
Move towards a centralized grid start in 1930s when Hoover dam was built as part of a large public works program to counter the great depression. The centralized power systems served our needs well in an environment where the world had to build large coal, oil, hydel, nuclear and gas-based power plants costing trillions of dollars. However, this system is expensive, technologically obsolete, heavily powered by polluting fuel sources and has failed to serve the last billion in developing countries who remain without access to reliable energy source.
Hence, the founders of modern power system had invented a decentralized system. At Reon, we believe that the world’s return to a decentralized system offers several advantages. A 2018 Integrated Energy Report published by Pakistan Business Council (PBC) stated that the centralized energy system in Pakistan results in 89% loss of primary energy compared to 65% for developed countries. This delta represents a significant economic loss to the national economy.
A decentralized power system can hence benefit us in the following ways:
1) Financial: It costs a lot less to build and operate a decentralized system. Moreover, a decentralized system reduces the overall Transmission and Distribution (T&D) losses.
2) Technological: A decentralized system tends to have more technological agility, it’s easier to introduce new technologies compared a larger system. Moreover, distributed systems can use improvements in battery technology to integrate a higher percentage of renewable power such as solar, wind, biogas etc. which are not just cleaner but also cheaper compared to fossil fuel-based sources.
3) Social: Distributed energy systems based on clean energy sources such as solar and biogas generate local employment and skill development opportunities, thus improving financial sustainability of the communities it serves.
Due to the inherent advantages of the decentralized systems, Reon aims to accelerate the transition towards decentralization through extensive use of advanced technologies such as blockchain, machine learning, and storage etc. as we believe this will lead to a more efficient, reliable, cleaner and economically efficient future for all.