Community Energy: A Grass Roots Revolution in Energy Supply

Recently, communities across markets such as the UK, the US, the Netherlands and Austria have started to play an active role in shaping their energy world. Coalitions of consumer groups, businesses, local governments and neighbours are mobilising around the generation and distribution of their own energy. Maikel van Verseveld, CEO of OMNETRIC Group explains.

There are several reasons why communities are taking a more active role in the energy market. Sustainability is, of course, a key driver, as is the reliability of supply. However, as our recent research study highlights, the primary goal is economic: people want to secure a more affordable energy supply and aspire to bring the jobs and profits related to energy generation and distribution back home.

What we are seeing is recognition from US and European citizens that community energy schemes are economically viable. Our own analysis shows that the cost savings from a community energy scheme could be enough today to prompt consumers to make the switch. We estimate that a single household could make a one-off per household saving of nearly $4,000 from a community energy scheme compared to going it alone, while also effectively hedging against rises in energy prices.

However, our research also indicates that while consumers’ growing enthusiasm for community energy cannot be doubted, a lack of in-depth technology and business knowledge has held some energy schemes back.

That said, technical competence within communities does appear to be growing, with some communities attracting experienced professionals from the energy sector, and nurturing their own experts ‘in-house’. Nevertheless, if community energy schemes are to live up to their potential, more needs to be done to support them. One source of such support could be the traditional utility providers.

Where do utilities fit in?

While it is understandable that some utilities might view community energy as a threat to their business models, now is the time for them to establish a role in the market. A new energy economy is emerging with or without utilities’ support. By getting closer, embracing and investing in community energy initiatives, utilities will potentially be able to benefit from the opportunities that unfold.

There are, broadly speaking, three models utilities can employ to help them adapt to the rise of community energy:

  1. Collaborative Community Partner – participating as a technical observer and sounding board
  2. Community Service Provider – consulting to communities and providing eco-system solutions that meet their unique energy needs
  3. Community Energy Platform Provider – acting as a market marker, utilities can develop and package a suite of solutions for communities designed to enable communities’ active participation in energy distribution

Encouragingly, some utilities are already actively pursuing the first two roles. The third offers a clear and profitable way for utilities not only to play a role in the emerging community energy market, but also to shape it.

 Transformation of the grid

What will the community energy grid of the future look like? We believe that supply will need to be coordinated through concepts such as the one we are calling the ‘Prosumer Energy Management Platform’. This will be a software-based platform that allows a community to measure, monitor and manage power generation and consumption across all households and businesses connected to its distribution system. The software solution will be cloud-based, to reduce complexity, adapt to differing scale requirements and remain affordable.

The technologies required for this concept – smart grid, big data analytics, IoT, etc. – are available today. What remains is for industry to refine them, and package them in such a way that any community can get their energy initiatives up and running with ease.

We are seeing a shift in customer mindset and an appetite to generate and consume community energy. This trend, combined with technological advancements and growing community energy expertise, means that energy supply is no longer the reserve of the traditional players.

Article originally printed in Issue 05 of TEM Tomorrow’s Energy Management

Join OMNETRIC Group on 13th September for their webinar entitled Distributed Power: A Community Story for more information on Community Energy.

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