Navigant Research Blog

European Utilities Are Moving toward New Energy Platforms at Different Paces: Part 1

Alexandre Metz — March 15, 2017

The energy industry is experiencing a profound transformation as the sector moves toward more intelligent, more distributed, and cleaner use of energy. Utilities’ traditional business models are being challenged by disruptive firms offering new services that leverage more advanced technology, as described in Navigant’s Energy Cloud analysis in its Navigating the Energy Transformation white paper. In the first post of this blog series, I describe six new energy platforms underpinning the energy transformation. In the next two posts, I will show that some European utilities have been more active than others in partnering with, and investing in, companies offering new energy platforms. Finally, I will argue that in order to be successful in the transition toward a smarter, more digital energy future, utilities will need to strategically adopt the most relevant new energy platforms.

(Source: Navigant Consulting)

Integrating Distributed Energy Resources (DER) into a single automated system allows utilities to manage resources more simultaneously and optimally than traditional network operations. DER include distributed generation (mostly solar PV systems and combined heat and power plants), energy storage (which can be used as both load and generation depending on the need), EVs (which act as a mobile battery), and demand response (i.e., adjusting customer load in response to a grid signal).

Electric Mobility refers to the electrification of transport and includes bikes, cars, buses, and trucks. The use of electricity as a substitute to traditional fuels requires the deployment of an electric charging infrastructure covering major routes and endpoints—both homes and offices. In addition to decreasing carbon footprint as compared to internal combustion engine vehicles, EVs can be used as a mobile battery providing capacity and flexibility services to the electric grid.

The Internet of Things (IoT) allows remote monitoring and control of objects connected together via a digital network. It provides new services in energy consumption intelligence and optimization for end customers. Residential customers can benefit from a connected home and commercial and industrial customers can benefit from a more intelligent building.

Smart Cities encompass a combination of services in energy, transport, water, and waste management. Such services are enabled by the three abovementioned platforms—DER Integration, Electric Mobility, and the IoT. City managers can benefit from a reduction of the city’s energy consumption and carbon emissions, improvement of residents’ quality of life, and resilience against catastrophic disasters.

Transactive Energy is a more granular approach to exchanging electricity. Traditionally, electricity is generated by large power plants and sold on a central wholesale market to retailers that in turn sell electricity to the end consumer. Transactive Energy leverages peer-to-peer trading technology such as blockchain and allows a more localized exchange of electricity at the individual level. Consumers with onsite DER such as solar PV and battery storage become prosumers and sell the excess electricity to neighboring consumers at a mutually agreed price.

New Telecommunications Networks based on wide-range technologies enable IoT and machine-to-machine communications. Traditional energy and telecommunications companies are competing in deploying and expanding these new networks that are complementary to existing communications systems.

These six new energy platforms require entrepreneurial creativity that is more likely found in a startup environment rather than a traditional utility. This is why several energy utilities—including the largest European utilities—tend to partner with, or invest in, recently created companies focused on some of the new energy platforms. In the next post of this blog series, I will show that some European utilities have been more active than others in partnering with, and investing in, companies offering new energy platforms.

The Energy Cloud

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