The way we consume energy is changing. We’re witnessing the ‘Uberization’ of energy; people are buying energy assets, such as solar panels and car batteries, to use at their convenience. And the IoT is enabling these devices to be connected to the Internet, bringing new commercial opportunities for stakeholders and a lot more data. The trouble is the supporting infrastructure is stuck in the past. To capitalize on the new energy landscape, the physical grid must evolve. Only then can the Internet of Energy be optimized. Without this, we’ll never know the full potential of smart energy and the benefits it can bring us.
From a commercial perspective, current processes are too lengthy for the new data-driven, decentralized energy landscape. Energy plans and agreements are defined in a rigid, process-led environment, where all actors and regulators must agree and market roles are tightly defined, as they have been for decades. Unfortunately, the existing system does not consider evolving business models.
Currently, grid operator monopolies manage the transaction environment, collecting money from millions of households and then distributing funds to the power plants. Unfortunately, this doesn’t make use of regional, intensively distributed intelligence, as provided by the IoT. There is a clear need to decouple the natural monopoly of digging copper from the gathering of information. In other words, we may be forced to divorce the infrastructure from the intelligence in the field.
A more flexible infrastructure can bring in added revenues for operators. People are buying energy assets for their own buildings, meaning they’re becoming more independent from incumbents, while patterns of grid connection use are changing. Grid operators may become a big data user without being obliged to gather all data internally.
Through the IoT, all these assets will be connected to the Internet in one way or another. Millions of individuals using their own energy assets can become part of the revenue streams, bringing clear benefits for energy providers, enabling operators to manage over- and under-capacity in a more intelligent way. However, it’s crucial that grid operators trust the data they receive from the assets. The information needs to be as reliable as that produced by a closed meter.
The Internet of Energy also brings more opportunities for a greener world. If data is secure and connected devices are properly protected against fraud, green energy consumption can be better incentivized. It will be easier for operators to identify those taking care to consider the environmental effects of energy use and reward them appropriately.
For a flexible system to be successful, though, we need strong cybersecurity, so that there is a sustainable trusted transaction environment. In the next part of our smart energy blog series, we’ll discuss the advantages of blockchain in establishing a sustainable trusted transaction environment.
For more information on the future of energy, make sure you don’t miss my speech at European Utility Week later this month, where I’ll be discussing the topic in more detail. Or come and see us at the show in Barcelona, where we’ll have a booth at ESMIG pavilion.
What are your thoughts on the Internet of Energy? Let us know by tweeting to us at @Gemalto, or by posting a comment below.