Democratization and decentralization – activists, prosumers, and the new Energy Internet
Consumers are increasingly becoming activists and prosumers. The phrase “Think globally, act locally” sums up this shift, describing how people concerned with the health of the entire planet are acting on a grassroot level. In the power sector for instance, increasing consumer engagement and activism is changing the business, compelling energy producers and providers to offer new levels of service and transparency. Their customers want to control their energy use, and they want to know, where their electricity comes from. They want guidance on how they as individuals can contribute to decarbonization, by buying renewable energy and using it more responsibly.
Smart and decentralized
To meet these new customer demands, energy companies are evolving from suppliers to advisors, offering their customers real-time data on consumption and cost. They develop smart meters, flexible billing systems and smartphone apps to meet the new engagement needs of their customers. The trend towards empowering consumers would be unthinkable without digitalization. Digital tools are the prerequisite for the move from consumer to prosumer, with everyone potentially being an active element of the ecosystem. This democratization goes hand in hand with the decentralization of our energy system. Future energy systems will be radically different from what we know today. We are moving away from the concept of a small number of large, conventional power plants feeding a centralized distribution system, towards a Smart Grid, integrating renewable energy sources into the power supply, decentralizing energy production as well as storage and with built-in flexibility and intelligence.
Handling the Duck Curve
While conventional, centralized energy production and distribution is fairly easy to control to meet shifting demand patterns during the day, renewable energy is harder to handle. For instance, solar energy typically peaks in the middle of the day, while energy demand increases around sunset, peaking in the mid-evening hours. Translated to a graph this timing imbalance produces what is known in the energy industry as the Duck Curve resembling the silhouette of a duck. The Duck Curve is just one of many challenges facing the engineers building the Smart Grid of the future. In short, the centralized grid will be replaced by a highly distributed system for both energy production, storage, and consumption. Energy will come from a wealth of different sources, some large, some small, from massive offshore wind farms to the solar panels on the roof of your neighbor’s house. All these sources feed into the renewable energy grid. To handle the mismatch between production and demand, energy must be stored for later use. And just as energy will come from many different sources, there will be many forms of storage, some centralized and high capacity, some small and decentralized.
The backbone of the green shift
The new democratic and decentralized Energy Internet will be the backbone of the transition to a low carbon economy. Engineers and software developers will be indispensable in developing its building blocks, whether it’s vehicle charging solutions, biofuels, dynamic energy billing or control systems monitoring supply and demand in near real-time. And by ideating, designing, validating, and implementing digital solutions, engineers and software developers will help energy companies cope with the increasing penetration of DER and drive value out of it.