Where is the internet of energy?
Back in the second half of the 1990s, when the internet was just getting going we hosted the Nature Magazine website when Dolly the sheep was born. We launched the worlds first online, multi-currency shopping mall and Europe’s first multi player online gaming service. The pace of innovation was incredible and, back in 1996, only 4% of the UK population where online. Today, we see 90% of adult online and the internet has, for some time now, has become part of our every day lives.
By contrast, today we have around 13 million smart meters, that’s over 20% of households connected but we see very little in the way of consumable energy services and obtainable innovation for our energy consumer.
I’ve spend the last 6 years working on the infrastructure required to support the new energy internet, the smart meter rollout in GB. Today there’s no shortage of smart homes to roll out new services using smart meter data and there’s a significant upside to the consumer to use these services as the average energy bill has increased from £500 a year in 2004 to £1300 today.
So what is stopping this revolution, what’s slowing the pace of change? Why don’t we already see millions of homes using these innovative new services? I’ve been working with innovative energy startups and new entrants over the last 3 years and this is some of the feedback.
I CAN’T ACCESS THE DATA
Many of the startups simply can’t access the data, many energy suppliers see them as competition, the central mechanisms in the market are not yet at scale. They simply have no route today to access the data from the smart meters that their services depend on. And no data means no service…
REGULATION FORCES ME TO BECOME A SUPPLIER
Startups who want to offer more than just selling kWh have to become a supplier. There’s no support in the regulation to allow them to provide their services to consumers and present a combined services and kWh bill without being a supplier. If they want to play in the capacity markets or provide a direct route for consumers purchase from generators (be them centralise or distributed in a peer to peer model) they can’t without become a supplier. And as we all know, a small suppliers life is a little challenged at the moment.
THE SPEED AND COMPLEXITY OF THE PREHISTORIC TECHNOLOGY AND PROCESSES
The most modern parts of the energy system use XML, the vast majority use CSV and FTP, 1990’s technology. The energy estate has grown to the point where new entrants have a choice of very few software vendors to “plug in” and doing it themselves is a life’s work. It can take multiple years to discover and integrated into the industries systems and if you need to change them a little, that can be a 5 year process! Also did you know there are more than a dozen way to monetise generation & flexibility? FFR, DSR, FiT, SEG, Capacity markets, PPA, Peer to Peer, time shifting, peak shaving to name but a few!
REGULATION IS OVERLY PRESCRIPTIVE
In the tens of thousands of pages of regulation the govern the industry, it often goes into painful detail on what you can and can not do, including full technical specifications within the regulations. Have you ever tried to write a technical specification in “legalise” and make it usable by designers and developers? Also, even with overarching regulation like GDPR, the industry has its own rules and regulations around privacy and consumer consent.
Some energy suppliers seem to be protecting their monopoly by slowing change and creating a climate of fear towards innovative new businesses. The regulator has announced that the “Supplier Centric” model needs to be reformed but in the short term (read long term if your not familiar with the energy industry’s concept of time) there’s no plan B and regulatory controls are set to increase on new suppliers.
One quote did rise a smile, one startup that was looking to become a supplier downloaded just one of the regulatory codes then must adhere to and said, “If I printed the regulation I could heat my home all winter”.
I’m confident we will see the internet of energy arrive and become successful, in reality we have little choice other than to deployed wonderful services that are engaging, save money and reduce carbon. But at what cost to business and the consumer in the short term?
Matt Roderick, founder of @n3rgy and head of Wondrwall Energy.