March 30, 2021
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Earlier in the month our UK team attended Enlit Europe, a global energy forum that addressed every aspect of the energy agenda. David Winter, Powershop UK’s Managing Director shared his experience leading Powershop UK from a challenger brand held back by legacy operations to a transformative, future focused energy business. Enlit 21 challenged retailers with new technology, thinking and ways of working. We’re going to unpack some key themes to share what you can expect from the global energy sector in 2022.
SMARTER ENERGY IS THE FUTURE
Enlit 2021 highlighted a lot of conversation around smart cities, smart grids and hardware to enable this. Smart grid research and innovation has significantly increased in Europe over the past decade, with many improvements due to increased innovation in technology solutions, as well as the growing focus on the role of smart grids in accelerating the digital and energy transition. Many projects focus on demand side management, particularly in the residential sector, with others including smart cities, smart network management and integration of distributed generation and storage.
We also saw discussion on cross-cutting issues such as cybersecurity, standardisation and the development of big data platforms to support key aspects of the energy transition. Distribution system operators (DSOs) and transmission system operators (TSOs), traditionally active in the smart network management domain, show a high level of participation in cross-cutting issues.
We see the need for these organisations to collaborate strongly with ICT and software providers, in particular in the smart network management and demand side management domains. Digitising business operations is fundamental to the role organisations will have to play in the energy transformation.
DATA IS KEY
Data is crucial to unlocking innovative new energy products, understanding energy usage and creating smart cities centred around renewable inputs. Using data to increase visibility will provide unprecedented insight into both retailer metrics and consumer behaviour. However, utilising this data will only be possible if energy retailers have updated their ageing software systems and technology stacks. Unless energy retailers lean on smart technology, they will struggle to capitalise on their newfound customer data availability and will be left behind by their more agile competitors.
The more visibility energy retailers have into how much carbon energy customers are producing, the more businesses are able to use their data strategically to develop carbon saving roadmaps and manage their sustainability targets while being smarter with unnecessary costs.
Smarter data analysis will also help retailers untangle the already complicated energy billing process with more accurate measuring. This will enable retailers to focus on delivering the insights on data to help inform their business strategy and create user specific experiences for their customers.
HYDROGEN FUELS CLEANER ENERGY
Europe’s transition to a decarbonized energy system is well underway. Following the (COP21) Paris agreement, the transition to transform how the EU generates, distributes, stores, and consumes energy will be a huge driver in 2022 and beyond. It will require virtually carbon-free power generation, increased energy efficiency, and the deep decarbonization of transport, buildings, and industry.
All available options to limit energy-related CO2 emissions by 2050 to reach “net zero” need to be considered. To achieve these goals the energy transition will require hydrogen at large scale - without it, the EU will miss its decarbonization objectives. Hydrogen offers a versatile, clean, and flexible energy source to lead the transition. It makes the large-scale integration of renewables possible because it enables energy players to convert and store energy as a renewable gas. The decarbonisation of the gas grid that connects Europe’s industry and delivers more than 40% of heating in EU households and 15% of EU power generation requires hydrogen.
Biogas will not be available at the required scale. Electrification with heat pumps can replace natural gas to heat new buildings, but requires costly, sometimes impossible retrofits in old buildings, which account for 90% of buildings’ CO2 emissions. Full electrification would also lead to major seasonal imbalances in power demand that would, in turn, require a power storage mechanism at large scale. Hydrogen does not suffer from these shortcomings and can act as a complement to heat pumps. Producers can distribute some hydrogen by blending it into the existing grid without the need for major upgrades, but it is possible to go much further than this.
Ultimately, energy suppliers can convert grids to run on pure hydrogen and we’re seeing more and more European companies looking to utilise this technology. Closer to home, our client Meridian Energy are also looking to explore Hydrogen opportunities in New Zealand, so we’re excited to see how we can continue to enable the uptake of these technologies with smart tech.
COLLABORATING FOR SUCCESS
Cooperation requires many stakeholders to decide on, develop, and implement energy initiatives. This collaborative governance and cross-sector collaboration will inform the approach of the energy transition, in which various actors (public authorities, energy utilities, property owners, housing cooperatives and software providers) engage collaboratively to foster measures for increased energy efficiency, digitalisation and decarbonisation of the European energy market.
There should be no silos in the sector as there are many lessons to be taught and learnt. We really enjoy being so active in the European and UK energy markets, as we see so many similarities with the challenges they face to companies in New Zealand and Australia. We’re really excited to share the new solutions we’ll bring to life next year for energy companies on this side of the world that are driving the energy transition forward. Events like Enlit 2021 are a great opportunity for the best minds in the business to get together and share our latest ideas. We hope to see you at Enlit 2022!
Sean Keane is our Associate Market Development Director based in the UK. Sean has been part of the Flux UK team since its inception and is our resident expert for all things Flux.
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