Page 30 - European Energy Innovation - winter 2017 publication

30 Winter 2017 European Energy Innovation
DECENTRALISED ENERGY
Breaking the silos: An integrated
approach to smart energy
By Frauke Thies, Executive Director, smartEn – the European association for smart energy solutions (pictured)
When Europe
established its 2020 The integration and increasing
objectives for the
energy transition
ten years ago, much of the debate
was focussed on the shift of energy
resources, away from polluting fossil
fuels towards cleaner renewable
alternatives. Only few would have
expected the entire sector, and its
prevalent business models, to change
so fast with it. In fact, when the Smart
Energy Demand Coalition, SEDC, set
out to establish the demand-side as
an interactive part of the energy value
chain, the system was characterised
by centralised supplies, delivered
uni-directionally to largely passive
consumers. Electricity, heating and
transport were separate sectors
with very little interaction. Today, it
is commonly accepted that the new
energy world is different.
On the technology side, we see
decentralised generation go along
not only with the rapid evolution of
storage technologies, but also the
automation of devices, allowing for
demand response and technology
interaction at various levels.
electrification of transport and
heating, so called ‘sector coupling’, is are establishing themselves as
advancing. Automotive manufacturers
are cooperating or even integrating
with heating and solar companies to
promote interactive solutions. Smart
appliances and building automation
optimise consumers’ energy use,
offering both comfort and the ability to energy system, regulation must also
adjust to signals from the grid.
Services have moved beyond simple
supply. Digitally-enabled business
models have emerged from the
need for facilitation, aggregation and
market-placement of energy and
services from distributed resources.
For example, companies specialise
in the identification of flexibility
resources in large production sites,
helping consumers make use of their
potentials. Others provide residential
energy users with solutions to optimise
their local power production or the use
of their heat pump. Many of the service
providers themselves make use of
digital service platforms enabling their and distribution system operators
business.
Coupled with this, the roles of the
different actors can no longer be
classified as they were. While network
operation remains a contained role,
the distinction between generators,
suppliers and consumers has
given way to new concepts and
combinations. Consumers are
becoming generators, asset owners
may be individuals, communities
or pension funds, and new service
providers have entered the market.
We are seeing traditional energy
companies with previous portfolios
of coal or gas generation, selling
off their assets and investing in
the management of decentralised
solutions and services. New market
entrants like independent aggregators
important players, and traditional
manufacturing, telecommunications
and IT companies are entering the
energy space.
With the changing realities of the
adapt. Decentralised solutions are
a central part of the Clean Energy
Package currently under negotiation
in Brussels. An updated market
design that enables the efficient
uptake of demand response, storage
and distributed generation is on the
table, including proposals to open
the markets for innovative products
and service providers. For example,
consumers should have the right to
choose dynamic pricing offers or
engage in self-generation, buildings
should become smarter and be
certified as such, aggregators should
be given non-discriminatory conditions
to provide their services to consumers,
are encouraged to source efficient
flexibility services from the market.
NOW, WHAT DOES THIS MEAN FOR
THE STRUCTURE OF THE ENERGY
SYSTEM?
Is the top-down approach to the
energy system now giving way to a
bottom-up approach? Some current
trends suggest so. Driven by existing
market rules and incentive structures
that are heavily determined by the
blunting effects of rigid taxes, levies
and charges, many prosumers
using the new opportunities of self-
generation and on-site flexibilities,
choose to go off-grid or minimise
interaction with the system, rather
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