Everyone uses energy every single day, often without giving it a second thought. From switching on the lights to operating an entire facility, energy consumption is something that many of us have never lived without – and cannot conduct business without – making it a commodity as common as food or shelter.
The energy industry has – and always will have – a guaranteed customer base, which doesn’t exactly cultivate an environment that encourages innovation. As a result, energy companies developed a reputation for being old-fashioned laggards who run their operations according to the same basic commodities bartering model as their Homo sapiens idaltu forbearers.
However, some in the industry like UK-based energy supplier, Centrica and California-based smart grid solution provider, California’s Spirae, are flipping that perception on its head. Rolling out to new technologies, implementing smart energy monitoring systems, and embracing the game-changing growth of the Internet of Things (IoT), Centrica, Spirae, and others are spearheading a long overdue digital revolution in the energy industry. digitization of energy head-on.
This digitization of energy encompasses a wide array of technologies and innovations, ranging from demand response programs, asset performance monitoring and energy-based operations management.
Even though the demand for energy accelerating, through new efficiency minded models, supply and demand become bilaterally responsive and equilibrium outputs are made dynamic. Aside from cutting out waste and making the entire energy ecosystem more intelligent this sort of system augmentation enables energy suppliers to uncover the hidden value of their own assets.
How Does Technology Influence Energy Spend?
A 2015 study conducted by General Electric found that the digitization of energy could add $50 million in additional value to existing gas power plants and $230 million to plants not yet built. For organizations operation on the supply side of energy, this means taking advantage of available technologies and pushing the needle even further to enable the efficient, clean and secure generation of electricity.
The innovative growth of smart technologies is spreading globally and for once energy is no exception. By 2020, more than 200 million smart electricity meters and more than 45 million smart gas meters will be installed throughout Europe alone. These intelligent technologies are key components in the burgeoning Internet of Energy, enabling facility managers and other consumers to reduce their need for electricity at certain times (without affecting operations).
New technologies are not limited to using gas-generated energy more efficiently. Everything from solar panels to generators to electric cars belongs to this group of technologies that influences energy spend.
As the price of crude oil continues to rise, companies all across the energy industry landscape can identify prime opportunities to incorporate these more sustainable, higher potential power generating and power leveraging technologies.
Data collection, in particular, provides tremendous value for consumers and facility managers alike, shedding light on exactly when, where and how their energy usage occurs. Smart technologies, paired with demand intelligent demand management, allows businesses to more fully leverage the operational flexibility of their assets – control with total visibility what’s being used when and how.
How The Digitization of Energy Unlocks New Revenue Streams
The digitization of the energy economy allows energy suppliers, for example, to control the flow of energy with greater intelligence and greater attention to the needs of the end user.
For its part, demand charge optimization is the lynchpin of the Internet of Energy that’s driving the whole industry forward. Through this systemically integrated feedback loop, consumers can determine when they need more or less energy and suppliers can analyze the data to better anticipate and manage production needs.
Best-in-class companies – regardless of their position on the demand, supply, or utilization side of the energy ecosystem – integrate these technologies into their standard operating procedures. Having this infrastructure in place allows these suppliers to constantly adjust their resources in response to prevailing economic and operational realities, significantly reducing the time-to-equilibrium and by extension eliminating deadweight losses.
Too abstract? In practice, suppliers hook into smart, connected assets to determine exactly when and how much energy is being used at a particular time. This in turn allows them to curtail or shut off certain assets when they are not in demand and redirect resources to support a spike in usage at a different time or place along the demand chart. The result is an average added value of $115,000 for every mW of generation capacity.
Further, the alternative dedication of underutilized assets to high-demand areas reduces pressure on energy networks and therefore decreases the need to invest in network reinforcement and repairs.
For the consumer, an embrace of a digital take on energy means rolling out and integrating into operations advanced energy insight systems. These systems provide simultaneously granular and panoramic visibility into energy patterns – measuring deviations in an operation’s electrical baseline, noting when a spikes occur, identifying what device is the cause and what needs to be done to avoid or correct it.
Such real time insights – aside from enhancing internal operational efficiency – allow smart energy consumers to forge informed and profitable demand charge strategies.
Putting Digitization to Work
It’s no secret that time relates unkindly to ill-adaptive businesses. For many decades, the prevailing thinking regarded the energy industry as the exception to this rule. Of course, such thinking is fatally flawed. Today, forward-thinking companies throughout the energy ecosystem are incorporating digitization trends into their operations with great success.
In an effort to close the loop and hasten the arrival of a truly circular energy economy, Centrica helps businesses and other heavy energy users turn power into an opportunity for savings. First, by incorporating demand response into its energy production and distribution, and second by offering its customers an advanced energy insight system that allows for a middle-out, piece-by-piece approach to efficiency.
With both side of the energy economy communicating and clicking on cylinders previously unseen, consumers can customize and optimize all the moving parts in their often Rube Goldberg-esque operations, while at the same time improving predicted outcomes.
Increasingly, we find that even those energy companies possessing the vision but lacking the innovative chops to digitize their operations manage to persevere. Those companies are partnering with technology firms to bring their business models into the twenty first century. Spirae is one such technology company that is helping the energy industry to flex its most atrophied muscles.
Spirae enables and leverages the digitization of energy through a distributed energy resources management system (DERMS). With its DERMS platform, the California-based company gives electric distribution operators the tools they need to be flexible about their energy sourcing. Operators can achieve optimal energy efficiency by monitoring, controlling, scheduling and dispatching energy usage. Users can also use the DERMS platform to optimize grid operations and manage peak load times without affecting operations.
Such innovation exemplify a fundamental realization of the Digital Age that eludes many of the still dilatory fixtures of the energy establishment: people are looking to relate to energy as a solution, not just a commodity.
The cost-conscious consumer seeks proactive responses to the rising cost of energy, not just to pay the bills as they come in. While demand response programs are the first step to reducing energy spend, the customers’ proactive stance can open the door to other solutions that have a greater impact on the economy, the environment and more.