Worldwide changes are awaiting the utility sector. How do we manage this?
Everywhere you go, consumers, prosumers, professionals, companies public and private are encountering headlines screaming innovation, sustainability, energy transition, the digital revolution and autonomous systems. The society is focusing on excelling towards a de-carbonization era, where governments are aiming to minimize the effects of the industrial revolution. As a result society, governments, companies, and consumers are looking into decentralized initiatives to lower their C02 emissions. These initiatives are managed by different types of critical smart software to create a holistic overview of all activities’, also named artificial intelligence generating data. These ongoing activities work as an integrated puzzle that causes the need for adopting a new business model for the current traditional energy model. This shift, from a traditional energy model to a new digitized energy model, causes insecurities and raises questions, such as: ‘What type of energy will we be using in 10 years from now, who will manage this energy circulation, and what will the market look like?’. In this article, I will discuss these trending topics along with possible Israeli technologies that could support this process. In short, the traditional energy model is shaken by its core. Never before had power utilities a need to such a comprehensive, holistic strategy for advanced analytics as they do today [1]. Therefore this article is not only addressing the flexibility of the sector, but the topics on how to deal with de-carbonization, decentralization, and embrace digitization and its tools available.
De-carbonization means that a sector, industry, or economy refers to the process of reducing — and ultimately eliminating — its carbon dioxide emissions [2]. This requires changes to grid infrastructure and raises questions about the design of the energy market. It will eventually lead to the elimination of fossil fueled power stations. Looking at the efforts of Europe to achieve a de-carbonized economy, renewable objectives have been set, but the policies and its measures have not been tested on how to positively achieve these goals. Therefore, companies like RWE and fossil competitor Uniper state that their CO2-intensive power plants are of importance to the integration of wind and solar network and should be kept to maintain a supply security or a capacity market[9]. It is seen that utility companies are marketing their own energy management smart tools, Eneco, for example, advertises its smart device Toon[3] for their consumers to become smarter about their energy and are closing large renewable energy contracts with larger players such as Airport Schiphol that will fully run on Dutch wind energy[4]. We also see retailers like Ikea diving into the renewable industry [5]. By entering this sector, retail companies are elevating the entire customer experience by providing control and personalization of the energy sector, also known as retailization. By enabling the consumer to have more control, it could take the industry towards a more horizontal approach: a top-down system that is being transformed towards a more interactive decentralized and fragmented network. Due to this transformation, it is of importance that network administrators are working with smart networks that can support the change of the traditional energy business model to a more flexible business model [6].
How do we achieve de-carbonization? The book ‘The Tipping Point’ by Malcolm Gladwell describes the paradox of an epidemic: in order to create one contagious movement, you often have to create many small movements first. I personally am a firm believer that small changes can create big movements, and therefore will focus on companies that support this de-carbonization process with small changes. Examples of companies that offer simple solutions, but can lead to big changes for the larger utilities companies. A few examples of this are technologies provided by UET and CQM that specialize in cooling towers without chemicals while minimizing the water and energy footprint and at the same time provide legionella prevention. Three other companies that offer solutions to minimize risks for the energy industry are 1. Gencell- a company that provides green power backup for a variety of sectors such as, telecom or other industrial companies through fuel cell technology when an energy shortage is experienced. Solar solutions like 2. IPV Solar & 3. Solview, which can support engineering and operations teams. Where IPV Solar send notifications to engineering teams on how the grid is fluctuating, Solview supports the planning team in peak and low solar demand and for what rate this can be sold. Through these solutions, it will allow utility companies to better target and engage potential companies and end users while using technologies that enable that supports the de-carbonization objectives.
Decentralization means that the main source of energy will be from renewables rather than fossil fuels and implies a newly structured energy system. Rather than generating power in a few, large plants, a multitude of distributed installations — from high-capacity offshore wind farms to farm-owned biogas plants and small rooftop PV installations — contribute to the power supply. The rising focus on decentralized, small-scale renewable installations implies a massive shift to an energy system no longer dominated by centralized power generation, the utilities’ traditional expertise [7]. To coordinate these complicated networks of power generation and consumption, digitization offers great solutions. Complex IT systems increasingly take center stage to balance power demand and supply. Energy companies already supply tools for consumers and themselves to create a holistic view of all the activities. An energy system that is being fed by prosumers (consumer generating their own energy via e.g. rooftop PV installations), utilities, coordinated by grid operators, while being used by EV charging stations causes a lot of extra load on the electricity grid. Therefore, it is of vital importance to streamline the activities on the grid. This is the perfect opening for artificial intelligence software that can monitor and — based on an algorithm — can adapt to the situation on the grid and operate by autonomous decisions [8]/[9].
The impact of digital technologies is likely to go far beyond the coordination of prosumers feed to the grid, improving efficiency, boosting reliability and resilience, and deferring or avoiding investment costs in a new generation, transmission and distribution assets [10]. A couple of examples of technologies that support intelligence and decentralization are companies like, Aquarius Spectrum that monitors infrastructure and pipe systems through sensors which are linked to a cloud system. The system notifies the operation team when it notices upcoming shortages or necessary repairs (e.g. beginning cracks or clogs). Another company supporting micro and macro grids is mPrest that provides mission-critical monitoring, a control, and big data analytics software. Mprest’s integrative system of systems is deployed in diverse applications including IoE (Internet of Energy) for the Power Utilities and smart cities and provides a holistic overview.
The integration of smart tools such as Toon or mPrest are providing more control to the consumers, which will — most likely — cause a shift in the traditional business model and affects the price. Therefore digitization is likely to be the next big step in this line of ‘catastrophes’ for traditional utilities, with no less threatening impacts,”. A good example for this is the “power plant operator without any power plants” by Next Kraftwerke. This company established a network consisting of thousands of small-scale electricity producers and consumers, creating a so-called Virtual Power Plant[12]. It is believed that market platforms should be tailored to customers so they can pick the features of their contract as they already do with cell phone subscriptions. The features could include flat rates or floating rates for different hours of the day. This becomes especially interesting when consumers turn to prosumers, and start using energy from the prosumers community instead of large utilities. These systems can be operated by using P2P blockchain technology — which also underpins the digital currency bitcoin — and enables the secure and cheap processing and record-keeping of electronic transactions [13]. A good example of integrating blockchain on the grid is Solar change, that allows utility companies, grid operators, and users to obtain real-time energy tracking, while also benefiting global trade markets through accurate, real-time data. Its proprietary technology strives to take smart predictions, insights, and forecasts to a new level. Enabling a decentralized P2P energy grid — a solution offered by the blockchain startup Tau-Chain that allows users the ability to implement virtually any P2P network.
Interested to know more? Don’t hesitate to contact me via anne-li.steutel@israeltrade.gov.il or view some of the companies in the following catalog. Companies represented in the catalog will be attending the European Utility Week 2017 — Hal 2D27 Amsterdam, on October 3–5, 2017
[1] https://www.navigantresearch.com/research/utility-analytics
[2] https://www.cleanenergywire.org/glossary/letter_d#decarbonisation
[3] https://www.eneco.nl/toon-thermostaat/
[4] https://www.parool.nl/amsterdam/schiphol-stapt-volledig-over-op-nederlandse-windenergie~a4511176/
[5] http://www.ikea.com/gb/en/ikea/solar-panels/
http://get.dexmatech.com/hubfs/Whitepapers/Utilities-EN.pdf?t=1502711643962
[6] https://www.pwc.nl/nl/marktsectoren/energie-utilities/netbeheerders.html
[7] https://www.agora-energiewende.de/en/topics/-agothem-/Produkt/produkt/375/Energiewende+und+Dezentralit%C3%A4t/
[8] https://www.stedin.net/...stedin/.../stedin/.../half-year-report-stedin-...
[9] https://www.navigantresearch.com/research/utility-analytics
[13] https://www.cleanenergywire.org/dossiers/utilities-and-energy-transition#DDD
[14] https://www.cleanenergywire.org/dossiers/utilities-and-energy-transition#DDD
[15] https://www.ensoc.nl/nieuwsarchief/column/tweetraps-terreur/
