As we move away from fossil-fuel-powered transport and see a growth in decentralised ‘virtual’ commodities such as digital currencies, it’s easy to imagine a reduction in environmental impact as a result.
But the reality is that the growing use of electric-powered vehicles and cryptocurrencies such as bitcoin is increasing our demand for electricity.
And while the volume of ‘green’ renewable generation is growing, the growth in global demand for energy means that fossil fuels will still account for 77% of global energy use by 2040, as estimated by the Energy Information Administration’s International Energy Outlook 2017.
Power hungry bitcoin
So let’s start by looking at bitcoin. According to Dutch bank ING, creating just one single ‘bitcoin’ trade uses the same amount of electricity as that required to power a home for almost an entire month.
With 16 million bitcoin in circulation, the cryptocurrency tracking site Digiconomist estimates that Bitcoin ‘mining’ (the complex computer-generated process required to create or process a single unit of this currency) uses around 30.1 TWh of energy each year. That’s equivalent to the annual power consumption of Morocco.
However, bitcoin mining is an international activity, with the majority of transactions occurring in China, where electricity is cheaper.
So any increase in cryptocurrency use is unlikely to have much impact on the UK’s peak demand requirements. Although, of course, the carbon emissions that result from this increase in energy use will ultimately effect us all.
EVs fuel rise in grid-supplied power
Electric vehicles (EVs) are a different matter, however.
As the UK government has announced a ban on new fossil-fuel vehicles from 2040, we’re going to see a huge rise in EV numbers on British roads. And with them will come an increased demand for electricity to keep them running.
However, according to National Grid, the huge increase reported by some media is simply incorrect. It estimates EVs will add around 5GW to peak demand by 2040, which is an 8% increase on today’s 61GW.
Although 5GW may sound conservative, National Grid believes it will be kept low as a result of EVs using ‘smart chargers’. These have inbuilt technology that is aware of how much electricity costs every hour of the day and can therefore – where possible – focus on charging during cheaper time zones, and not at peak periods.
More widespread use of ‘time of use’ tariffs
This obviously envisages the greater use of ‘time of use’ tariffs, which are likely to impact all consumers, and businesses in particular.
It’s another reason to look at demand side response opportunities and ways to introduce flexibility to manage consumption away from peak periods. For example, by using on-site generation and/or battery storage.
If you’d like to find out more – or discuss how future changes are likely to impact your business – do please get in touch. Existing customers can talk to their Client Lead. Or you can email us at nBS@npower.com