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Transactive Networks

Jaime Silk, Advisian | December 2016

Technological, social and digital shifts are creating new and exciting opportunities for

the energy market

Great innovation is being developed, helping people and businesses bypass many market barriers. For example, peer-to-peer energy trading, community energy platforms, smart homes products, grid assisted PV.

There is real value in the transactive grid, where every day people buy and share electricity with each other, dynamically changing behaviours to meet theirpersonal goals.

However, for this to be a success, everyone must be across the grid’s vision and value.

The Transactive Grid

Components of a transactive grid experience include:

The Sharing and Social Economy

The Internet of Energy

Big Data and Analytics

Consumer Energy

Assets

Many are innovating to find the sweet spot:

PV/ESU Sale

PV/ESU Lease

IHD/ Smarts

Securitise

Peer-to-Peer

Community Schemes

ESU/DR Services

Mobile Bills (EV,

PV)

Energy Advising

Integrated Billing

Seeking Opportunity From TechnologiesConsumer Energy Assets | IOT | Analytics | Social | DigitalInnovating to Meet Business ConstraintsLower cost to service | Reduced churn | Agile | Low/flexible investmentDeepening Consumer RelationshipsDifferentiating from price | Driving acquisition/retention.Creating ValueCreate and capture value for consumers | Cutting risk profiles

Exam

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that

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Whilst others are holding back until they see the value:

“The market is healthy.”“New tech take up is

tiny.”“Its too early to invest.”

80% renewables in New Zealand – technically and economically

does more investment make sense?

11% more

consumers on TOU

Record switching

1.7% Retail

Price Fall, 1st In 15

Years

77%growth in installed

PV

Innovation

in players & offers

2105 EA KPIs

Transactive grids are where we all come together to create value, but…

They mean different things to

different parties who speak

different languages:

Micro-gridsDistributed Energy Resources

Peer-to-PeerCommunity Energy

Distributed Systems OperatorsMobile Power Bills

Virtual Power Plants

The starting point is the consumer telling us things aren’t right…• Prosumers become very

engaged consumers• Retail prices drive frustration,

which drives self-use of PV (60-70%)

• For incumbents this is volume ‘lost’ (25-33%)

The result… • Prosumers bear more ‘costs’• The system ‘pushes’ up prices

Supplied kWh

PV Kwh

Stepping into the sharing economy

When someone has a surplus of something – space (Airbnb), underused car and time (Uber) – this can be ‘shared’ with and used by people who need or want these things at a lower price point and more conveniently. ‘Sharing’ can also apply to energy…With a few changes in people’s habits, 88% of PV from one home can be consumed instantly across 3 homes*.

Gridmates

*Research homes, EEA Conference 2106

The sharing economy works because…

Everyone is different• Habits

• Flexibility• Motivators

• Physical environment

People’s ability to change their use of

energy is a factor of their material

environment, learned energy practices and

learned habits.

Material Culture

‘Be frugal’

Energy Practices

Material Culture

‘Make it happen’

Energy Practices

Material Culture

‘Be efficient’

Energy Practices

Material Culture

‘Make it easy’

Energy Practices

Energy Economic Energy Extravagant

Energy Efficient Energy Easy

Energy consumers’ habits can be grouped into 4 groups:

Energy extravagantEnergy poor

Energy efficient Energy easy

Sharing creates value through…

Least cost to change

Social connections

Incidental demand Productive

sitesEfficient

use

• Matching prosumers’ solar PV generation to consumers (sharesumers) who have the least cost to change energy use to use that generation

• Sharing surplus solar PV with someone’s demand that already matches your production

• Creating incentives for investing in solar PV at productive sites rather than simply at home

• Finding the best use for generation• Connecting with people who want to achieve the same goals as you

Connecting people in networks around technology can:

• Make customers sticky (i.e. mobiles)

• Turn customers to advocates• Create a multiply effect (i.e. one

engaged prosumer can draw in two to three sharesumers)

• Open doors to new conversations

Sharing on networks spreads costs of fixed assets (i.e. reducing everyone’s prices).

But how do you engage 1000s of people on potentially

millions of devices?

A Chain Reaction?

Sharing needs trust. In reference to the transactive grid, trust needs a meter.

For now…

blockchain offers a distributed database technology that can securely log every

transaction or event in real time, with instant access for automated decision, reconciliation

or settlement……anywhere, to any device.

For example:

2 Nov 2016

Stepping into the digital economy – the new energy

conversation

Frank and other AI apps start relevant, low cost dialogues

A conversation that is automated

Frank – one of the next generation of intelligent personal assistants - looks at what is known about us and starts a relevant conversation at a time when we are likely to be interested.

For example…

Frank and other AI apps start relevant, low cost dialogues

Scenario 1: Frank knows from past behaviours I like ‘green’ stuff so am likely to be interested in solar PV. Frank uses the weather to wait for several sunny days when I will have seen lots of solar PV producing ‘free’ energy for others and starts a conversation.

A conversation that is automated

Frank and other AI apps start relevant, low cost dialogues

Scenario 2: Frank knows solar PV can’t go on my roof (might know I rent etc.) but still like ‘green’ stuff, so after several sunny days Frank asks if I want to share in other peoples solar PV.

A conversation that is automated

Frank and other AI apps start relevant, low cost dialogues

Scenario 3: Frank sees when I have had a very big power bill so targets a ‘can I help you’ question when it comes through.

A conversation that is automated

A conversation that is informed and relevant

Smart meter data and analytics enable a relevant, targeted dialogue.

Underlying (estimated) activity can include:

• Morning showers• Day time load

• Peaky discretionary load• Peaky winter heating

• Sustained winter heating… add personal history and local context, and offer

real help.

Chart Source: Piclo

A conversation that is digitally targeted to business or consumer value

A data analytics model can link back to value drivers, including:

• Network constraints and prices

• Energy market price peaks

• Reserves• Renewable or low GHG

generation• Surplus PV

… connecting markets, consumers and appliances.

Source: Enphase

Source: EA

Source: Orion

Sharesumers can be offered specific choices tailored to:

• Their load analysis• Known preferences• Physical appliances

… the Internet of Things (IoT) extends convenience, choice and trust.

Hi, care to share some load and save on your bill? Select options

Scheduled appliance

Managed water

Get text prompts

Hi, there is local PV available, want to share in it? Select options

A conversation that is personalised

Scheduled appliance

Managed water

Get text prompts

A conversation connecting people

Prosumers and sharesumers can be engaged to share by inviting other consumers to use the system and drive behaviour change.

Source: Gridmates

Hi, find your friends and neighbours. Invite to share.

Peter H

The kids

Local suggestions

A conversation that can help to do some good in the community

For example:“Don’t get angry at feed in prices, donate and feel good!”“Rent a roof from the school or a neighbour in need.”

Relevant, intelligently targeted services can be shared between many participants,

including:

• Solar city (i.e. PV, ESU, self use)

• First gas and supply chains

• Mitre 10 – smart thermostats, appliances,

insulation• Share PV in town - where

your EV is parked

A conversation that creates value through a transactive ecosystem

Hi, we think we can meet your needs better.

Hi, your heating energy use looks high. Our friends can help.

Off peak bonuses

Better solar use

Check out PV

EV Extras

Battery Payout

Cut my bill

Using plug in heaters

Need comfort

Cut my impact

Transactive grids for consumers

can be personal and simple when we all participate.

When innovators and incumbents start to think: Digital | Social | Connected

…we will create value for everyone

DISCLAIMERThis presentation has been prepared by a representative of Advisian.The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive.Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to, Advisian. Advisian and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information or correcting any error or omission that may become apparent after this document has been issued.To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Advisian and/or any of its agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.