Engerati’s Year In Smart Energy - Looking Ahead To 2016

Innovation and new market players will continue to disrupt the energy sector at an accelerating pace during 2016.
Published: Wed 16 Dec 2015

In our 2015 forward look we identified innovation and forward thinking as key and so it has proven. From the past year two examples serve to highlight this: The New York Reforming the Energy Vision proceeding, which envisions the future utility as a ‘distributed system platform provider’; and the formulation of the ‘energy services company’ model by Capgemini as a future model towards which utilities can start evolving today. [Distributed Energy Resource Markets Coming To New York and From Utility To Energy Services]

These are disruptive concepts and will require further innovation to achieve in a timescale that is fast compressing. The pace is heating up in the sector. The costs of distributed solar PV are dropping fast and installations are on the increase. Storage is also becoming more accessible, in no small part due to the arrival in the home market of Tesla. CEO Elon Musk’s vision of a ‘battery in every home’ has moved from pipedream to possible. Other new entrants are coming into the sector.

Add to this COP21, occurring right at the end of the year with its implications for the energy sector, and it is clear there will be no let up of pace in the year ahead. So what are some of the trends Engerati’s editors see for 2016?

The renewable challenge

Jonathan says: To meet the COP21 outcomes the share of renewables in the global energy mix must grow rapidly.

Some countries have targets and we expect to see others to introduce targets and for the targets to go higher, in more cases up to 100%. Currently Denmark and most recently Hawaii are the highest profile examples of the 100% goal. [Hawaii Looks To 100% Renewables]

While the jury is still out on the costs and challenges of achieving 100% renewable generation on a large scale, especially of the intermittent type, such a target sends a strong signal of aspirations. And of course the higher the target the higher the outcome.

At the grid edge

The low voltage distribution grid has long been a black hole in terms of visibility for the distribution operator. With modern grid challenges ranging from the simple like theft to the more complex like behind the meter generation this is a critical issue which needs a solution.

Solutions such as the Itron Riva platform and Tollgrade’s LightHouse platform are starting to do this, with intelligence at the edge.

The use and value of such platforms will continue to grow. With the potential of Riva for example to serve as a common platform for other services beyond electricity, such as gas, water, streetlighting, etc., it not only provides the greater visibility that the utilities want but also offers a pathway towards a true smart city. [The Grid Edge – New Utility Opportunities]

2016 - the geeks arrive and disrupt

Adam says: If the energy sector thought it was getting more IT the recent launch of the Breakthrough Energy Coalition will change all that. It reads like a who’s who of the tech world - there may almost be too many chiefs. What will be more seismic is the approach and DNA of the organization - it is poised to disrupt.

Reading the quotes from founding members shows a frustration and impatience on the lack of progress. Statements show a desire to innovate and more importantly to work fast – the tech speed these individuals know and are comfortable with.

For an industry which for the most part Edison would still recognize, the speed this organization will want to work at will be like a Ferrari driving past an 18 wheeler.

As Facebook CEO Mark Zuckerberg said: "..progress towards a sustainable energy system is too slow, and the current system doesn't encourage the kind of innovation that will get us there faster."

This organization can put in effect something similar to the Marshal Plan, a long term view which rebuilt Europe, and its founders are connected, willing and know how to get things done.

I predict it will galvanize the tech community like nothing else and the first impacts of the Coalition will start to be felt in mid-2016.

Engaging the customer

Denise says: The shift towards customer centricity will continue to gain momentum as utilities realize the opportunities available to them.

The new energy customers have become  active participants in the energy market and must be catered for accordingly. They want to be digitally connected with their supplier and expect a more innovative level of interaction. [Putting Innovation at the Core of the Business Strategy]

A number of companies like Opower have been hard at work trying to convince utilities of the opportunities in creating a customer centric business strategy. E.ON UK, through Opower’s digital platform, has seen a reduction in churn and operational costs. [E.ON Story part one: The Business Case]

Digitization of the communication between the customer and utility will continue to develop. As a result, even more opportunities will come about, thereby opening the door to even more innovation in this space. [Supporting the Customer Transformation]

Data - a valuable commodity

Data will continue to grow in volume and the winning market players will be the ones doing something valuable with it. [Big Data-Creating Big Business Value]

Data, if assimilated and analyzed smartly, will open the floodgates to even more new market entrants who will be hungry to snap up the significant opportunities that exist in the sector. Already, new market players like Metry and Enervee are reaching out to consumers directly with solutions to help them save money on their energy bills. Others are making energy trading more accessible to  consumers.

This trend will only grow as consumers see the benefit of having choices so as to reduce their bills and environmental footprint.