Two major themes emerged in the smart home discussions at EcoBuild in London last week. The first is that technology for the transition to the smart, low carbon era already exists. The second was that test cases are showing that this new era of energy will place the consumer at its heart.
“Hardware like solar PV continues to decrease in cost and will reach grid parity very soon,” said Erwin Frank-Schultz, executive IT architect for energy and the utilities at IBM UK and Ireland. “Software is also here,” he added, citing the various apps enabling people to monitor and use their hardware smartly. But what is missing is integrating them all so that they work in a unified, consumer-friendly system, Frank-Schultz said.
Specifically, the observed convergence of the information technology (IT) with the operational technology (OT) is a trend that will lead the smart era, Frank-Schultz pointed out.
Be local and smart
Locality and smartness should go together said Rebecca Sweeney, smart systems project manager at the UK's Energy Technologies Institute (ETI) and Mark Wary of Innovate UK, the UK's innovation agency.
ETI currently helps three British councils (Manchester, Newcastle and Bridgend) to develop a localized energy infrastructure transition path to low carbon and smart future that places consumers at its core.
Similarly, Innovate UK has invested £11 million (US$16.6 million) in a program of collaborative research and development to stimulate innovation in localized energy systems, so that councils can become low carbon and tackle energy poverty.
EDF vs smartups
However while the vision for going smart and local appears to be a shared one, the reality is far from uncontested. The disruption to the established energy systems due to the increasing role of renewable energy and smart systems emerged clear following the presentations of Sarah Bee, R&D electric transportation manager at EDF Energy and Matthew Rhodes, managing director at Encraft, a startup specializing in micro-generation, on-site renewables and low carbon buildings.
EDF, Bee said, is predominantly known for its nuclear power plants fleet, however it is also investing in renewables and recently has targeted green R&D. Specifically, Bee added, EDF believes the usage of clean electricity will increase due to the electrification of the transportation systems and the development of battery optimization and storage systems.
In January, EDF UK commenced a research project related to battery optimization and storage systems. The project considers potential grid-connected households that install PV and electricity storage systems but are locally controlled, based on a dynamic model of decision-making that involves the consumer at its center.
Bee, who is involved in the project, said the concept's technical viability is a given and what is vital to explore is business models pertaining to this application. For example, is such a project scalable? What opportunities arise for the supply chain development? And what are the legislative requirements it needs to be implemented?
There are many levels for this project, Bee explained. It can take the simple form of a house with solar PV but not any great active control in place; the more developed form of a house that on top of its solar PV it also offers consumer-based dynamic control interface; and it can also grow more complicated targeting at whole communities that go energy independent, with houses collaborating and exchanging power as if they were a power plant.
This last option exceeds EDF's interests, said Bee, who has decided to research the second case.
Where giant corporation EDF does not aspire to go, is exactly where startup Encraft is undertaking leading research, Rhodes explained.
Encraft's vision is to at least half everyone's electricity bills. To achieve this Encraft hopes to optimize energy demand and supply within a community cycle, not a household alone. Community level optimization can balance the supply and demand of energy between different houses and time periods (so-called “load shifting”). Thus, eventually a local ‘people's power station' can be established.
“We are a bottom-up organization”, said Rhodes, “who is not facing households as consumers but as players within a new type of energy system. If you treat people just as consumers, then you limit the concept.”
Encraft's pilot project will use fifteen houses, although a larger study of 8,000 houses is also to be simulated in cooperation with the University of Nottingham.
Localized energy systems that deploy renewable technology like solar PV and apply energy demand shifting and optimization within a provisional electricity tariff structure can save households up to 45% off their energy bills, said Encraft's Rhodes. The research will prove the case's technical viability, but will also require lobbying efforts to deliver regulatory changes to makes this option possible.
The contrast in the ambitions and approach between the EDF and Encraft was reminiscent of remarks energy academic Dieter Helm's has made in the past. Speaking of the big utilities, Helm, a Professor of Energy Policy at Oxford University, recently wrote that “companies do not like to downsize and they reinvent themselves only when faced with massive challenges. It remains to be seen whether in electricity they are pushed, or they jump – or perhaps they slowly wither.”
Small startups, like Encraft, are doing the push job that Helm refers to and solar PV is playing a key role.
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