There is plenty of change happening in the energy industry, ranging from an increase in production from renewable sources to changes in how we consume energy - for instance the electrification of transport. We also have the nationwide rollout of smart meters which will enable more ways for people to be more engaged with their energy consumption, and consumers are also becoming attracted to using new smart energy infrastructure such as thermostats, lightning or microgeneration.
Alongside all this, there are developments in areas that many people would not immediately associate with the energy sector. Personal devices, home appliances and even our vehicles are now becoming connected to the internet. Developments in machine learning and artificial intelligence are enabling us to process information faster and with better accuracy and sensitivity to context. The internet of energy things is arriving fast!
It is digital systems that will link all these elements together. Data analytics will give new insight into how we can optimise our energy usage and will inform us when appliances aren’t operating correctly. Integrated systems will be able to send commands to assets telling them when is best to store, use or supply energy. Furthermore much of this can be automated by using variable price signals, which we expect to become more prevalent in the coming years.
Digital energy will introduce new products and commercial offerings for consumers
It’s all about business models! An important aspect of digital energy innovation is that it will unlock a host of new business models. I’ve picked out and described a few notable ones below:
- With the introduction of faster and automated switching of energy supplier, price comparison websites could move from a model of providing advice to consumers to taking full control. In this scenario a price comparison company might assess consumption patterns and energy supplier offerings to find the best deal on a regular basis, and then take a share of the price savings made.
- We are likely to start to see energy contracts bundled with other products as a Utilities as a Service offering – where companies will monitor home energy efficiency and balance energy costs by installing new white goods or household insulation.
- It’s difficult to talk about radical changes in business models without mentioning blockchain and distributed ledger technologies. These technologies will decentralise energy trading and enable prosumers (consumers who generate their own power through microgeneration) to trade electricity directly with their neighbours.
This is by no means an exhaustive list. Digital energy developments will see products that utilise energy data in neighbouring sectors including healthcare, security, independent living, transport and insurance to name a few.
How many times have we come across a new smart phone App and thought “that’s a clever idea, I wish I had thought of that”, often based on a clever bit of insight into data, sensors or context related information.
Similarly to the inventive playground that a smart phone provides to app developers, digital homes, connected energy devices and increasing volumes of diverse data represent a similarly rich playground for energy innovation!
Innovate UK’s role in the digital transformation of our energy system
Innovate UK is the UK’s agency for driving innovation and growth in business. We work with colleagues from across Government, the Catapults, businesses and academia. Our aim in energy is to cultivate innovation which will enable UK business to grow and also benefit the public through making energy affordable, sustainable and reliable.
We do this in a number of ways;
- By identifying opportunities for innovation and growth (such a battery development and smart energy systems)
- Engaging with industry stakeholders and connecting those who could benefit from partnerships
- Funding strong opportunities through competitively won grants
- By engaging with Government to ensure policy is suitable to promote innovation
You can learn more about some of our funding opportunities online:
- Infrastructure Systems competition - Round 3 of our Infrastructure Systems competition is open for application until the 13th September and welcomes applications in the areas of smart infrastructure and energy.
- The Faraday Challenge - As part of the Government’s Faraday Challenge, Innovate UK will be investing in battery development to ensure the UK is a leader in batteries for electric vehicles.
- Vehicle-to-Grid competition - We have launched our Vehicle-to-Grid (V2G) competition which will invest £20 million to develop improvements in the way electric vehicles interact with the electricity grid. As uptake of electric vehicles increases, more people will be able to store power during periods when consumption is low (or production is high) and then use it, or supply it back to the grid at those times of the day when electricity is in higher demand. Digital innovation will be needed to coordinate this and ensure it is done intelligently.
Emerging and Enabling Technologies competition, which will support areas including digital innovation will open soon. Digital and energy systems components will be a valuable addition to strengthen applications for these competitions.
The FT Digital Energy Summit
On 19th September I will be attending the FT Digital Energy summit alongside professionals from across the digital and energy industries. The line-up of speakers will include representatives from energy suppliers, equipment manufacturers, digital innovators and government.
There we will be discussing the strategies, processes and technologies that will be needed to realise a successful digital transformation of the energy industry. We will focus on the digital tools and platforms that can help organisations engage with customers and employees to provide value-added interactive services, drive efficiency, and lower costs.
I look forward exploring new ideas and benefiting from the wide range of knowledge and expertise of other attendees.
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