The Developing Smart Energy Ecosystem

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The way the world produces and consumes energy is changing fast. Sustainable energy sources such as solar and wind are on the rise. Smart meters​ have become an industry standard, and deployments are growing across the globe. Hybrid and electric vehicles have gone mainstream, giving rise to a new breed of powerful car batteries capable of storing and sharing energy. In addition, the Internet of Things is enabling compelling new business models that support an increasingly complex energy infrastructure.

How is the IoT driving change in the energy ecosystem?
We’re in the midst of an exciting smart energy transformation. New stakeholders join the energy marketplace as they install solar panels on homes and businesses and purchase electric vehicles where power is stored. The IoT is a key driver of this smart grid​ evolution, enabling innovative ways to leverage devices, data, and remote access to create new business opportunities for various stakeholders. The trouble is, the supporting power infrastructure is stuck in the past. The physical grid needs to evolve to capitalize on the new energy landscape and “Uberize” power production and consumption. Without it, the world will never realize the “Internet of Energy” and the full potential of the smart energy ecosystem.

How does the energy infrastructure need to evolve to “uberize” energy?
It’s a tall order to evolve a well-established, 100+ year-old industry! From a commercial perspective, many of the current energy processes and rules are too complicated and lengthy for the new data-driven, decentralized energy landscape. Energy plans and agreements are defined in a rather rigid, process-led environment. All actors and regulators must agree, and market roles are tightly defined, as they have been for decades. Unfortunately, the existing system does not incentivize evolving business models.

However, integrating new sustainable distributed energy resources (DER) into the existing grid, designed to distribute centrally generated energy, is as appealing as challenging. Tapping power from renewable sources is generally more cost-effective than generating energy from fossil or nuclear sources, making the trend very compelling; and, once started, irreversible.

So, what needs to change for this exciting evolution to occur? It’s a marathon, not a sprint, and it involves changes on many levels. To better understand, let’s examine changes one step at a time.
Separating the physical infrastructure and IoT solution management is essential.

Currently, grid operators control the entire energy transaction environment, collecting money from millions of households and then distributing funds to the power plants. Unfortunately, this system has no way of including and using regional, distributed intelligence provided by new energy assets and the IoT. There is a growing need to decouple providing copper lines and power from gathering information from new assets like solar panels on the grid’s edge. In other words, we are moving toward divorcing the way we finance physical infrastructure from the management of energy data and IoT deployments that enable intelligence in the field.

More flexible infrastructure can bring in added revenues for both operators and asset owners. As people buy energy assets for their own homes and buildings, they become more independent from the energy infrastructure in the process. Consequently, grid use patterns are changing, and operators become consumers of big data users without being obliged to gather and manage all the data originating on the consumer side. That is an important evolution because operators can now aggregate information from many sources and use artificial intelligence for predictive maintenance, outage prevention, and improved quality of service.

It all depends on trusting the IoT to drive the Internet of energy.
The IoT and connectivity are at the center of ecosystem evolution, and both must be trusted. By connecting meters and new assets to the Internet, ecosystem participants can use their energy assets to become part of the revenue stream. That brings clear benefits for energy providers, enabling operators to manage over and under capacity more intelligently and avoid extensive grid capacity investment. However, grid operators must trust the data they receive from these assets. The information offered by new entrants needs to be as reliable as the data produced by a grid asset that operates under full control and ownership of a grid operator.

Suppose data is trusted, and connected devices are properly protected against fraud. In that case, sustainable energy consumption can be better incentivized, bringing more opportunities to “green up” energy production and consumption and improve our world. With trusted data, grid operators can identify participants taking care to adapt their usage to the availability of local energy generation and reward them appropriately.

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