The Emerging Clean, Intelligent, Mobile, and Distributed Energy Ecosystem

To quote the moderator of the Beyond the Electron podcast I participated in last month, “The energy system isn’t what it used to be.”

And that’s the exciting truth coming out of 2018. During that discussion, I explained that the global energy system is in the midst of a transformation more disruptive to the utility status quo than anything we have seen in the past 150 years.

A paradigm shift is unfolding today. Technological innovation, new products and services enabled by digitization, and the rapid rise of electrification of the transportation sector have unleashed a barrage of business model experimentation. Such experimentation will rewrite the rules for how electricity is generated and consumed well into the future. Multiple tipping points initiated by a diverse influx of technology innovators are laying the groundwork for what can increasingly be described as a clean, intelligent, mobile, and distributed grid.

What’s Next?

So, what’s next? This consumer-centric revolution in energy will be defined by a whole-scale shift away from the centralized hub-and-spoke model toward a network of assets, customers, and value exchanges. Two-way energy flows and greater interactivity among market actors, including prosumers, will increasingly shape how markets are structured. At Guidehouse, we call this the Energy Cloud—or a customer-centric network of networks.

In the Energy Cloud, the goods exchanged among networked actors go beyond the electron to include services offered among prosumers and an explosion of data. All three—electricity, services, and data—will drive new value creation. The demand-side networks initiating these transactions will attract increased investment totaling more than a trillion worth of infrastructure and technology deployments across the retail segment of the utility value chain by 2030. In this emerging ecosystem, customer choice, innovation, and agility will command a premium.

Energy Cloud Platforms

Guidehouse recommends market actors focus on areas of technology convergence and innovation in the new energy ecosystem. In our recent white paper, Energy Cloud 4.0, we identify seven such areas—or Energy Cloud platforms—through which an increasing percentage of electricity is expected to flow: Integrated Distributed Energy Resources (iDER), Building-to-Grid, Transportation-to-Grid, Transactive Energy, Internet of Energy, Neural Grid, and Smart City. Although not mutually exclusive—these platforms will overlap—each is expected to generate billions in new investment in component technologies and infrastructure development by 2030.

Energy Cloud 4.0

(Source: Guidehouse)

New DER deployments are already significantly outpacing new centralized generation capacity (30 GW of DER capacity vs. just 19 GW of new centralized generation capacity in 2017). Coupled with sensors, communications capabilities, and other enabling technology, this infrastructure is laying the foundation for a dynamic iDER platform across all global regions. Virtual power plants (VPPs) leveraging a network of smart gensets coupled with demand response capabilities are just one example of an iDER solution deployed today.

A Proactive Role

Increasingly, we see utilities taking a proactive role in cementing partnerships with innovative technology providers and, in some cases, actively acquiring innovative solutions. Green Mountain Power and Tesla are one example of a utility-technology company partnership using iDER to assist residential customers with energy storage systems. Together, they are putting the technology in customers’ hands. Thus, they are giving customers access to the Energy Cloud while leveraging early success with small-to-medium solar and storage microgrids to drive reduced peak demand charges.

To learn more about Guidehouse’s Energy Cloud 4.0, download our white paper and join us for our upcoming webinar. Jan Vrins, global Energy practice leader at Guidehouse, Mary Powell, president and CEO of Green Mountain Power, Paula Gold-Williams, president and CEO of CPS Energy, and I will discuss Capturing Value in Energy Cloud 4.0. We will focus on several developing value streams for stakeholders with potential intersections among power and energy companies, utilities, government, technology providers, manufacturers, and beyond.