Tag Archives: Business Models

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.

Register Here!

Maikel van Verseveld, CEO, OMNETRIC Group

A conversation with Maikel van Verseveld, CEO at OMNETRIC Group

Maikel van VerseveldMaikel van Verseveld is CEO of OMNETRIC Group and leads a growing team of experts dedicated to developing and delivering integrated smart grid solutions for an increasingly digital grid.

What’s new at OMNETRIC Group?

April 2017 marked our third anniversary for OMNETRIC Group—a kind of coming of age. Over the past three years, working with utilities, there is no debate that a transformation to a smarter grid is needed. Utilities around the world are modernizing their infrastructure for greater reliability, efficiency and sustainability gains.

What do you think a smarter grid looks like?

Utilities continue to invest in smart metering. In fact, many are already revisiting their initial rollouts to determine how they can achieve greater value from deployed systems.

We also see grid companies looking ahead toward platforms that can accommodate the increasing penetration of renewables. There is also a growing appreciation for data-driven insights generated by a more intelligent network.

Is there one major trend you see emerging?

In addition to transformation, the trend that I believe merits closer tracking is democratization; in other words, initiatives that aim to involve you and me in the generation and distribution of energy.

We see increasingly more community programs, where a coalition of stakeholders – consumer groups, businesses, local governments – come together with a joint agenda and action plan for an energy system.

Haven’t we been here before with smart cities?

In some respects, yes. We made progress, but ultimately many of the smart city programs stalled. The reasons were diverse. Above all, the technologies to underpin such initiatives were nascent and quite simply too expensive for broad-based adoption. In addition, the schemes were largely driven top-down and perhaps overshot citizens’ requirements at that time.

What has changed?

Several factors are at play. Undeniably, distributed energy resources have matured and proliferated, and the significant fall in the price of solar PV makes it an obvious choice for consumers—at least in sunny climates.

According to the Rocky Mountain Institute (RMI), the community-scale solar market for municipal and cooperative utilities could exceed 10 GW through 2020. Likewise, storage capacity continues to grow, and while the cost of storage remains relatively high for now, other options are emerging, such as reconditioned car batteries for household use, or virtual energy storage.

Can you give us some technology considerations for communities?

Information is a critical success factor for community energy initiatives. First, one of the major goals for communities is to better understand their local energy system, from generation through to consumption.

Armed with this information, communities also seek to evaluate the economic value created and distributed within the system. This increases transparency as a basis for discussion between different stakeholders, including the community constituents.

Also, while communities are generally small, relatively speaking, in terms of demand requirement/supply capacity, they often take a broad perspective on all aspects of energy when they determine their goals. They aspire to a more holistic, integrated view that brings together multiple resources, such as electricity, gas and water, plus heat and electric vehicles for the benefit of the citizen and community at large.

What is the impact of the community energy trend on utilities?

While disrupting the traditional distribution model, there is a role for utilities to play. Most communities aspire primarily to enable their citizens to benefit from cheaper, greener energy, and most are looking for help to achieve those goals. Utilities would do well to consider how they can use their expertise and infrastructure, as well as their experience with municipalities and cities, to offer new solutions and services to communities.

Join Maikel van Verseveld on 13th September for a webinar entitled Distributed Power: A Community Story’  at 3PM London/10AM New York

Register Here!