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5G: what are the opportunities for the energy sector?

5G was launched in the UK on 30 May 2019 to much fanfare. While this was limited launch, confined to only a handful of areas in a handful of cities, and with the technology nowhere near its full capacity, but make no mistake – 5G will be everywhere in coming years.

For the average consumer, 5G will typically see an increase in download and streaming speeds for their entertainment of choice, whilst also enabling a more integrated connection between their handheld device and their household smart devices – from turning up the thermostat to setting lighting levels via voice command.

Whilst 5G will no doubt change the way consumers interact with technology, these same features will also create new opportunities for energy businesses.

Asset monitoring and optimisation

In both mature markets such as solar, and maturing but still developing markets such as battery, the ability to "sweat" an asset to draw out ever greater returns will continue to persist. The maintenance and optimisation of the existing asset is second only to the installation itself in terms of the base from which top performance is built.

Increased connectivity and speed, along with reduced latency would enable maintenance providers to monitor the productivity of an asset with ever increasing detail, with the ability to collect vast amounts of data without spending vast amount of people hours. It will become increasingly easy for a maintenance contractor to see where the inefficiencies lie in a project and respond to them in real time.

Remote and automated monitoring, such as use of drones or other "robotic" technology is also becoming an increasingly popular solution, reducing frequency of required site visits.  Again, although the technology is still in a relatively early stage, it is not difficult to see that this is another area, which has the potential to benefit from 5G.

Demand side response

5G is also a potential boon for demand side response providers, which work by reducing electricity consumption when demand is high, and increasing it when demand is low. Classic examples of this involve supermarket freezers. There is no need for the freezers to be on and consuming electricity every single second of every single day – the food is not going to defrost because the freezer turns off during the time it takes everyone to make a cup of tea whilst the Love Island advert break is on. Small breaks such as this can significantly reduce the cost of consumption over the course of the year, and businesses may even qualify for extra benefits as a result.

Demand side response therefore requires a constant analysis of real-time data, the outcome of which then needs to be communicated  along multiple system lines in order to co-ordinate a meaningful reduction or increase in electricity usage. The increase in communication speeds and reliability brought on by 5G could produce a real benefit to those providing, and using, demand side response services.

Aggregation

By its most simple description, aggregation of assets involves taking technology that would usually be considered as individual and, using software or otherwise, group these to form one functional asset. By way of example, a number of companies have seen success in Germany by installing batteries in people's homes and then utilising these batteries as if they were one big power station. The homeowner gets the benefit of being able to use electricity from the battery which has been drawn down at times of low demand (and is therefore cheaper), or stored from solar panels attached to a roof, and the supplier/aggregator gets the benefit of being able to utilise excess energy to sell back to the grid at times of peak demand.

Of course, the key to being able to respond to peaks and troughs in demand, and to sync and activate the installed batteries lies in the reliability of the communications network. Again, improved response times, connectivity, and reliability will be a welcome addition to this area.

The flipside – increased energy usage

Whilst there are certainly opportunities for developers, operators, maintenance contractors, and ultimately investors, it is becoming apparent that, at the service provider level, the installation and operation of 5G base stations is going to lead to a significant increase in energy consumption from the 4G model.

This, coupled with emerging energy-hungry technology such as cryptocurrency (or more specifically, mining of cryptocurrency), and the increasing uptake of electric vehicles, will present new challenges for an energy market which is arguably seeing its biggest change since the first industrial revolution.

It is not clear exactly how this will play out, but decentralisation continues to be a theme, and we will likely continue to see businesses and communities take up their own energy projects, from rooftop solar installation to behind-the-meter battery storage. All of which may be combined with demand-side response technology, which - with the help of 5G - can be managed ever more efficiently. 

Conclusion

It is apparent that 5G is going to change a lot of things – from how we interact with our phones to the potential of driverless vehicles. As with all change, there will be plenty of challenges, but also plenty of opportunities for those that know where to look.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at February 2020. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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