How Energy Resource Decentralization Will Impact Manufacturing

Solar panels on the front of an office building.

Modern digital technologies and hardware advancements are contributing to sweeping transformations across the world. Many industries are changing as a result of innovative tech like IoT, AI, blockchain, and advanced robotics.

It’s no surprise then that both the engineering and manufacturing industries are seeing something of a renaissance in regard to modern tech. Manufacturing plants and factories are becoming more efficient, automated, and crowdsourced. Technologies like 3D printing and other cost-effective solutions allow manufacturers to deploy plants closer to their customers, affording more direct customization and consumer input for products. Equipped with this technology, companies can now build products and goods to the specifications and demands of their customers.

But there’s another innovative group of technologies driving change. They are altering the traditional concept of energy and power—centralized through a nationwide or local grid—and uprooting its structure. It’s given rise to the adoption of decentralized energy resources.

What Is Energy Decentralization?

To put it simply, decentralized energy is produced and located close to where it’s going to be consumed. Instead of being generated at a large plant in a remote location and passed through a centralized grid, it’s generated using various, often renewable sources locally. For example, one homeowner might have their own solar power generation system to zero out their energy consumption levels.

In reality, it’s no different than the decentralization of manufacturing as a whole, brought on by innovative technologies like 3D printing. Decentralized manufacturing setups put you closer to the consumers and provide opportunities for better personalization to your target audience.

There’s more to energy decentralization than structure, however. It is also considered “decentralized” in regard to impact. Because it’s often generated locally and through renewable sources, it has the potential to considerably lower carbon emissions, environmental impact, and even transmission losses.

Security is also increased as a result, because consumers are not generally sharing the supply via the grid and relying on a single or select few power hubs. Often, if the power goes out for a traditional grid, decentralized energy users retain their power.

The cost savings are greater than just more efficient usage and self-serving energy sources. Renewable energy owners—such as solar owners—often sell their excess energy back to the grid in traditional environments. But they could just as easily market the excess energy to nearby homeowners and their surrounding community, offering much more competitive pricing than the conglomerate power providers.

According to Power Ledger’s co-founder, the peer-to-peer energy network has helped consumers save up to $900 annually on their electric bills. Solar panel owners have earned double what they would normally get from a standard solar generation plan. Imagine that translated to a larger scale for organizations and manufacturers!

Currently, there are many projects and concepts in the works to establish a system of crowdsourced or community-based power networks. One such idea involves blockchain, allowing homeowners to sell their excess energy directly to other consumers.

How Will Decentralization Impact Manufacturing?

Renewable energy is seeing incredible growth today, which is good for everyone. California plans to have 50% of their state’s energy consumption covered by renewable sources by 2030.

But renewable energy alone—or its widespread adoption—won’t constitute lower prices. It is the decentralization of these reserves and systems that will drive a more efficient, buyer-friendly market.

Of course, it’s not all positive. Switching to a renewable or limited energy source may also have repercussions for security, scalability, and storage. If the power fails, you need to have enough energy stored away to continue operations when relying on renewable sources. You also need to be sure the grid or local supply you’re tapped into can handle the growth of your organization or operations. This can lead to more red tape during normal operations and expansion that you wouldn’t otherwise have with traditional energy channels.

Yet the potential implications for power-hungry industries like manufacturing are immense. To kickstart lowering operational costs, manufacturers could install their own on-site, renewable energy sources to cover or mitigate energy consumption. Barring that, they could tap into local communities to buy energy at considerable savings.

The opportunities for manufacturing, among other industries, to benefit from such energy decentralization are exciting and will continue to grow as the movement continues to gain momentum.


Image Credit: Rudmer Zwerver/

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