smart energy business models and technologies

Emergent Smart Technologies and Business Models to power

Decentralised Energy

Andre Burgess

Partner, BrightPath Technology

Introduction

• BrightPath Technology provides solutions in distributed, low

carbon energy generation and demand side management,

including energy control, monitoring and business

modeling.

• Our work is underpinned by an appreciation of the value of

data and the importance of making sense of the increasingly

complex and huge amounts of energy data available.

• We apply the insights we develop from our day-to-day

service delivery into the innovation programmes and trials

we are also participating in.

Agenda

• What do we mean by Smart Energy?

• Current Challenges

• Smart Energy Technologies

• Smart Energy Business Models

What do we mean by Smart?

Making this a thing of the past?

Smart Grids – what, where, how?

• A Smart Grid involves more flexible consumption and production of electricity.

• Flexibility = modifying generation and/or consumption patterns in reaction to an external signal (e.g. price) to provide a service within the energy system.

• This will produce a more interactive system which produces savings for consumers.

• This is contrary to the current, inflexible, inefficient generation and transmission system

• Economic, sociological and environmental factor are driving change.

• A Smart Grid both enables and is enabled by:

• Distributed and variable generation.

• Consumer awareness and control

• Demand side management is a key component of this

7

7 The future… A Smarter Grid

Centralised

Image source: Arup

8


Centralised + Decentralised | Distributed

Image source: Arup

9


Centralised + Decentralised | Distributed + Smart

Image source: Arup

Demand side management

Challenges

• Entrenched market models:

• Who pays for transmission network / centralised gen power in a smart energy world?

• Cost of change/infrastructure

• Supply Chain Structure

• Control of networks

• Standardising a global vision

• Key components need to be able to interact effectively through common standards.

• Need for standardisation and interoperability is relevant throughout the supply chain, including for generation, distribution, interfaces, management of systems and networks, data models, security and methods of communication and data exchange.

• Government intervention on regulatory/incentive drivers

Supply Chain Value

Smart Technologies

‘Smarter’ Residential ecosystem

Smart Energy Business Platform

Minimal and predictable

grid demand

Consumer Access Device linked to fiscal

sub meter

A smarter grid has two mutually re-enforcing foundations:

• Smarter infrastructure: from intelligent networks through to end user level (e.g. smart meters and control technologies)

• Smarter data: e.g. usage profiling, demand elasticity, integration with external data (weather, pricing etc.), storage availability, property data.

Battery Storage

Solar diverted to

heat storage

External data inputs –weather,

demand etc.

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Solar PV Generation

Solar

Grid

Loadexport

Solar PV

Energy shift through behavioural change and appliance automation


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Solar PV GenerationSolar

People at home during the day

Maximise demand

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People at work during the day

Appliance Automation

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People at work during the day All excess energy exported

to the grid but in return for lower peak tariff

Hot Water Tank

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Solar PV Generation

utilisationutilisation

PV to heat store

Reduced gas Reduced gas

Solar PV, heats the hot water tank during the day, hot water then available for use during peak energy demand, hence energy shift but only if water is heated by electricity. Would also reduced gas demand if gas heating is installed.

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Solar PV Generation

utilisationutilisation

Battery

Reduced peak grid electrical energy

Reduced peak grid electrical energy charging

charging

Off peak low cost tariff Off peak low cost tariff

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Solar PV Generation

Private Wire –Solar Share

Grid

Load LoadShare

Solar PV



Smart Meters

• Smart meters are at the hub of the transformation in functionality

• 53 million Smart Meters set to be deployed in UK over next decade

Improving billing accuracy

Providing meaningful consumer insights

Reducing operational costs

Reducing overall / peak demand

Supporting smart grid implementation

Pro-actively managing consumer debt

Dynamic tariffing

Accelerating EV adoption

Enabling increased use of intermittent supplies

Facilitating aggregation of DSR

Facilitating transaction around smart controls

Current Meter

Smart Meter

Courtesy of BEAMA

Courtesy DECC

Courtesy DECC

The Importance of Data

Monitoring / input Value / Function

Key to Smart Grid implementation

• Enables, Validates and Delivers• Energy and cost savings• Lower tariffs• New revenue Streams• Efficient use of energy

resource• Carbon reduction and more

sustainable energy generation• Value added services• Incentives for more capital

investment• ESCO & SSCO model validation

• Continual improvement -Identifying and reducing energy, cost and CO2

• Establishing stakeholder engagement & insight

Incoming supply (total)

Sub-metering (heat, light, appliances etc.)

Temperature & Humidity

Occupancy

Building Services / Appliance

External data

Fiscal billing meter ( smart meter)

Used to identify consumer usage & aggregation of targeted energy reduction and control

Used to reduce heat, prevent degradation and ensure client wellbeing.

Manage control protocols , target heating, ensure client wellbeing.

Used to provide system / appliance level demand response.

Used to correlate building assets, weather, TV schedules, events, energy supply with project data etc.

Supply SideTariffing, Monitoring demand + Renewable, Storage and National Grid energy supply

An integrated, smart future

Increasing instrumentation will drive convergence of industries and emergence of new platforms: the lines between the energy producer, transmission operator, distributor, energy retailer and consumer are blurring

Business Models

Smart Energy Business – potential value streams

• Reducing amount of supply from the grid and maximising use of on site generation, E.g. manage the differential between £0.05 per kWh for export and £0.15 paid for retail.

• Supply arrangements: Dynamic time of use pricing (including DUoS), providing incentives for consumers to shift consumption away from peak price periods in a day (on an automated or price incentive basis); Currently domestic consumers pay a single unit price for their electricity (or simple peak/off-peak dual meter tariff if using economy 10 or 7) and bills are based on total consumption.

• Using DSR / aggregated DSR to manage the balancing position on a real-time basis, rather than purchasing expensive top-up power on the balancing market.

• Demand curtailment (aggregated): Electricity consumers can be paid by National Grid for responding to signals to decrease demand and stabilise the local network as part of the Balancing Mechanism (FFR, STOR etc). Large volumes of demand are required but smaller sites can be aggregated through commercial arrangements. Battery storage capacity / frequency response offer high value in the Balancing Mechanism.

• Dynamic asset management: Peak output periods from wind and solar is beginning to create price troughs on the day ahead to balancing markets because of a surplus of generation on the system. Creates an opportunity to buy low cost power in periods of high solar or wind output. Further income upsides are accessible through trading on the difference between the predicted and actual peak output periods between the day ahead market up to the balancing markets.

Smart Energy Business Platform

Tenants save 4p/kWh

SEB On-site PPA 11p/kWh

Minimal and predictable

grid demand (15p kWh

typical)

Consumer Access Device linked to fiscal

sub meter

Private Wires

Supply Chain Value revisited

Value component How could value be accessed?

Wholesale electricity Reduce consumption.

Become a generator and sell power or avoid the need to purchase power.

Time of use pricing - avoid purchasing electricity at peak price times and sell

generation at peak price times.

Supplier margin Reduce consumption.

Generate and consume power within a private wire network and avoid/reduce the

need for licensed supply.

Partner with a supplier and share/reduce some of the supplier margin value.

Become a supplier.

Balancing costs Reduce consumption.

Better prediction of consumption to reduce peak price electricity.

Actively manage demand in order to reduce imbalance costs.

Access revenue through the balancing market.

Note time of use pricing required for the above.

Transmission charges Reduce consumption.

Generate and consume power within a private wire network. As soon as electricity

enters the distribution network transmission and distribution charges will be

incurred.

Distribution charges are time period based may be reduced under time of use

pricing arrangements if demand can be shifted to lower cost charging periods.

Distribution charges

VAT Reduce consumption.

Low Carbon and social levies Reduce consumption.

Generate and consume power within a private wire network.

Thank [email protected]

smart energy business models and technologies

Environment