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.
Internet of Things solutions (IoT) are enabling compelling new business models that support an increasingly complex energy infrastructure.
Let's see the present picture and what can be done to reap the benefits of new technologies, step by step.
How is the IoT changing 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 vital 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 bad news?
The supporting power infrastructure is stuck in the past.
To capitalize on the new energy landscape and "Uberize" power production and consumption, the physical grid needs to evolve.
Without it, the world will never realize the "Internet of Energy" and the smart energy ecosystem's full potential.
How do we "uberize" energy?
It takes some doing changing a well-established, 100+-year-old industry!
- Many of the current energy processes and rules are too complicated and lengthy for the new data-driven, decentralized energy landscape from a commercial perspective.
- Energy plans and agreements are defined in a relatively rigid, process-led environment, where all actors and regulators must agree.
- 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 it is challenging.
Tapping energy from renewable sources is generally more cost-effective than generating energy from fossil or nuclear sources, which makes the trend very compelling; and, once started, irreversible.
So, what needs to change for this exciting evolution to occur?
To better understand, let's examine changes one step at a time.
Step #1: Separate infrastructures
Currently, grid operators control the entire energy transaction environment, collecting money from millions of households and distributing funds to the power plants.
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 power lines 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 of the energy infrastructure.
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.
This is an essential evolution because operators can now aggregate information from many sources and use artificial intelligence (AI) for predictive maintenance, outage prevention, and improved service quality.