Pause for a moment and imagine a world where your electricity is supplied by Netflix, along with your TV and films. A world where you buy your new washing machine with a lifetime supply of electricity. Or one in which you can charge your electric car away from home by simply logging directly into your own account with a unique ID.
We are on the cusp of a digital revolution, transforming how consumers interact with energy businesses and engage with new products and services. The dawn of the prosumer (producer + consumer) and the development of cost-effective renewable energy solutions means consumers can now generate their own power and, to a limited extent, sell back their surplus energy to others. The rapid growth of electric vehicles and the exponential growth of new technology is enabling this transition, reframing how consumers interact with the energy market.
This huge digital transformation is driven in large part by the government’s roll-out of smart meters and by companies bridging the gap between this smart energy system and home automation, which connects thermostats, appliances, sensors and batteries via the Internet of Things (IoT). The scale of this transformation is ably demonstrated by an International Energy Agency (IEA) estimate that by 2040 1 billion households and 11 billion smart appliances worldwide could be actively participating in how consumers use electricity.
‘Beyond the meter’ challenger organisations are embracing digitalisation and driving new solutions for the benefit of consumers. For example, smart home technology company Verv is developing products that can now pinpoint which appliances are using energy via their unique energy signatures. With the help of artificial intelligence, consumers’ specific energy profiles can be identified and monitored, providing a wealth of benefits. These include detecting appliances that have been left on inadvertently; monitoring appliance efficiency to detect when there are problems occurring and even support for vulnerable consumers via home alert systems.
Electron, a developer of Blockchain systems for the energy sector, builds innovative platforms to decentralise critical components within the energy services value chain, supporting the transition away from legacy systems and processes thanks to breakthrough in distributed ledger technology – a database that is consensually shared and synchronized across multiple sites, institutions or geographies. These systems ultimately deliver on the promise of a clean energy future by increasing grid efficiency, reducing transmission losses and accelerating decarbonisation. With better availability of demand side responses and having a smoother performing demand-supply system, Electron could start enabling a flexible trading platform, such as peer-to-peer and micro-grid trading.
Gemserv is playing a pivotal role in enabling the development of these disruptive innovations, which are radically changing the way we consume energy. There are many implications in these scenarios that need to be managed carefully by service providers. How, for instance, is the local grid balanced? How does each market participants’ responsibility in the supply chain shift when the house (the micro-generator) is sold on or rented, potentially disrupting the local power supply? How do we deliver benefits to all consumers whether ‘market engaged’, ‘market disengaged’ or ‘vulnerable’? We need to ask ourselves, what does it really mean to place the consumer at the heart of the energy market?
Current regulations (including licensing and industry codes) are undoubtedly constraining UK energy market transformation. Wholesale change that empowers consumers in the new digitalised market is simply not possible within the current set-up. In light of our strengths in the provision of governance, compliance and assurance solutions, Gemserv aspires to create and maintain an environment that frees up innovation without reducing the protection that regulation affords.
We must take steps now to bring data, and the exchange of data, together under one governance roof, to ultimately benefit all market participants. The recently designated Retail Energy Code (REC) is one logical place to host this governance. As a Code Manager, Gemserv wants to harness the huge potential of data management and governance in ways that supports and protects market participants, while ensuring the highest standards of data protection and cyber-security. By combining data and digital technology, we can drive efficiencies, reduce the frustrations with the current set-up and liberate innovation in products and services, striving for the benefit of everyone.
Graeme Forbes is the Head of Market Solutions at Gemserv