The Energy Cloud Forces a Rethink of Data Access

Most people in the industry have heard of Guidehouse’s Energy Cloud, our vision of the future energy market. While many in the industry will talk about the shift from unidirectional power flows to bidirectional power, Guidehouse has talked tirelessly about how value and data flows will also become bidirectional. The Energy Cloud 4.0 white paper focuses on the digital platforms that will underpin the many new business models created in the Energy Cloud. Why this focus on platforms? Because the Energy Cloud is as much a digital transformation as it is an energy transformation.

Energy Markets Rely on Predefined Data Flows

I recently caught up with innovation specialist and decentralization evangelist Neil Pennington. We discussed how the current approach to defining data flows within the UK energy industry will be a barrier to decentralization. Two companies are responsible for defining data flows: ELEXON for electricity and Gemserv for gas. Anyone interested in how data flows are defined for can look at all 227 data flows on the MRA website. These data flows relate to standardized business processes, where ownership is explicitly defined.

The Internet of Energy Has Evolved in Several Waves

While these rigid processes may (only just) serve the requirements of a basic competitive energy market, they are unlikely to scale to a distributed system. This is best explained using the idea of a fractal network. There are numerous layers of connected devices within the electricity system. Each layer was deployed in separate waves. Each wave complements previous ones rather than replacing them. Each wave connects many more devices than its predecessors. Each individual device has less intrinsic value, but once aggregated, brings economic benefit to the grid and consumers. Often different communication and data storage technologies can be used for different waves.

• SCADA: Tens, hundreds, or a few thousand devices, focusing on the highest value assets
• Distribution management: Tens or hundreds of thousands of distribution assets
• Smart metering: Millions or tens of millions of meters
• Energy Cloud: Hundreds of millions of generation, storage, EVs, charging points, thermostats, and demand response-enabled devices

SCADA, pervasive distribution monitoring, and smart metering are all new realities. Utilities and other market participants can manage data from tens of millions of devices using tried and tested methods that bake-in predefined data flows, create data siloes, and discourage data sharing.

The Energy Cloud Requires a Different Approach to Data

Optimizing a distributed energy system relies on distributed, open access to data. Automation is a critical component in an energy system where potentially hundreds of millions of customer-owned devices can participate. This automation will be based on a system operator calling for services throughout the day—be it the dispatch of power, turning off loads, etc.—by using market signals. Distributed energy resources (DER) will respond to these market signals based on customer preferences. If data is buried in siloes, visibility into the market is obscured, processes slowed, and parts of the market cut off to potential participants.

What the Energy Cloud requires is a system where all participating devices expose data into an energy marketplace and is made available to all permissioned stakeholders. System governance becomes less a task in defining data flows, and more about defining the boundaries in which different stakeholders may participate. This allows DER to communicate and transact with other DER without necessarily involving a system operator. The system operator will only need to intervene if certain constraints will be breached.

This concept of replacing data flows with data exposure is only part of a much wider issue regarding data availability. I will address the latter in a follow-up blog. It is, however, critical to the future success of a distributed energy system and is an area any platform provider must address.