Power to the people
Digital technologies have come of age just in time to present electricity system operators with solutions to solve the considerable challenge of handling more distributed renewable resources and customers producing as well as consuming power, while maintaining reliability and keeping costs low.
Huge investments are being made in the digital transformation of global industry, estimated to reach $1.18 trillion in 2019 by the International Data Corporation, an increase of 17.9% over 2018.
But the erstwhile slow pace of utility digitalisation across the value chain from the point of generation to distribution bears witness to the fact that technological advances alone are not enough to lead the revolution in this conservative industry, especially one that depends on changing customer behaviour. As consumers also become producers and system operators optimise flexibility using demand response programs, traditional roles are becoming blurred and new definitions and regulations will be required to harness the full benefits of the digital offerings under development.
The EU’s Clean Energy Package has made a start, but retail markets in Europe still need further redesign. DSO/TSO coordination, how to enable ancillary services from distributed energy resources, increased use of electric vehicles and battery storage and smart buildings all present opportunities and challenges for energy market stakeholders.
Digitalisation is one of the Council of European Energy Regulators’ (CEER) three ‘D’s for its 3D 2019-21 strategy, alongside decarbonisation at least cost and dynamic regulation. It is calling for public comment by 14 May to a consultation on how to develop regulation to ensure that digitalisation benefits consumers.
The future is flexible
Engerati will take a closer look in May at the opportunities this agenda for digital change brings and the opportunities it holds for utilities and technology providers alike. We will showcase expert opinion and highlight the most promising new digital utility projects.
Already, this week we have heard about three different initiatives to aggregate resources or enable more efficient use of flexibility at the prosumer level, including Limejump’s virtual power platform, GreenCom’s acquisition of German energy management company shine and a project still in the testing phase but soon to publish results, the Horizon 2020 GOFLEX project.
Some of these projects are backed by industry consortia, demonstrating a spirit of cooperation between utilities, technology providers, academic institutions and the public sector that will serve as the foundation for rebuilding the gas and electricity networks with the tool of digitalisation. Customers will become much more switched on about how to optimize their consumption and more aware of opportunities to maximize returns from their own power sources.
A new model is developing for so called “platform providers” – companies which can connect buyers and sellers, sometimes without owning assets themselves These platforms are enabling the shift to a more decentralised energy system where customers and smaller utilities have flexible trading opportunities with a wider market than before. Vattenfall’s deal with the Isle of Man’s Manx Utilities to use its Flex Expert electricity trading platform is a good example of this, covered in our sister publication Utility Week.
“The digital platform puts the customer in control, with transparency and ease of use key to its success,” said James Hunt, who leads Vattenfall’s sales and origination business in the UK.
Engerati will focus on a key topic or country theme each month. We are keen to hear from our members, so please do not hesitate to get in touch if you would like to share your views and project findings or if you would like to propose a theme.