Is energy innovation broken?

A global survey of 750 senior executives spanning 15 countries and eight sectors showed that out of the eight sectors, the energy sector ranks seventh for innovation.

The survey conducted by PA Consulting, showed that organizations could be flushing as much as $620.7 billion down the drain each year. In fact, the survey found that 53% of senior executives have seen a brilliant idea fail for reasons that could have been avoided. Another 41% describe their innovation as a ‘costly failure.’ Some of the biggest innovation killers include fear, lack of focus, engine failure, the wrong return on investment, and reluctance to invest.

For more download the report here

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Energy efficiency investment creates jobs

Economic growth and job creation always seems to be a central focus for policymakers at every level of government. So it’s only natural that when energy efficiency policies and programs are being discussed one of the questions that often comes is how will proposed initiatives affect jobs.

The good news is that job creation is one of the many benefits that results from smart investments in energy efficiency. A report from ACEEE – Verifying Energy Efficiency Job Creation: Current Practices and Recommendations, looks at efforts to quantify job creation from energy efficiency projects to see how they are being done and to try to establish some best practices to help people in the field tackle the problem.

For full report see here

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The next generation of energy efficiency programs could save 22% of electricity use in 2030

Energy efficiency has come a long way. From the energy crises of the 1970s, it has grown and evolved to become an integral part of our energy landscape.

Energy efficiency has done much to improve our economy and environment, but more can be done. Most states have policies and programs in place that seek to achieve even higher energy savings. A number of national efforts similarly aim to increase energy efficiency to achieve economic and environmental benefits. A clear example is the EPA Clean Power Plan, which seeks to achieve significant reductions in carbon emissions. Energy efficiency can play a major role in achieving emissions reductions under the plan.

After all this success with energy efficiency, what’s left? Has the limit of energy efficiency been reached? This is a particularly vexing question for utilities and organizations that run efficiency programs for utility customers, and this is the subject of ACEEE’s latest report. For full report see here.

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Report from the ISGAN conference in Italy

In September ISGAN organised a conference in Lecco, Italy, near the beautiful Lake Como. The key theme was The role of communication as a critical enabler of smart grid systems.

I presented at the conference on the topic Communication as the enabler for integrated services – smart cities.

As a government organisation ISGAN’s focus is on policies, regulations and high-level industry strategies. Several ministers, the EC, as well as regulators and industry representatives, from both the energy and the telecoms industries, presented at the conference.

Supported by massive changes in communication technology the changes in the broader market, often led by consumers, were earmarked at the event as being big game-changers. However, while new opportunities do indeed exist the reality is that for most of the traditional electricity companies it is difficult to realise these. There are several reasons for that and these were discussed at the conference:

  • In most countries, either directly through ownership or indirectly through regulations, governments have a dominant influence on the sector. A lack of political vision and leadership and an inability of regulators to step in are a serious hindrance to settling on the direction of the industry. Political indecisiveness and lack of bipartisanship is perhaps the worst thing that can happen in this situation as it paralyses the industry.
  • But at the same time, based on the industry practices and very long-term investment cycles that have dominated the industry for decades, the industry of today is risk-averse and led by management that in most cases is unable to seize the new opportunities that are becoming available within an increasingly disruptive environment.
  • Furthermore, the transition from the old silo-based energy economy to the new open-ended, interconnected one is very complex, and this transition will be messy. However the industry has no choice but to tackle this and increase its pace of change. This applies both to the industry and to its policy-makers.As a consequence, all of the above changes will happen. It is hard to predict exactly how it will work out, but there are several trends and developments already taking place which will have a profound impact on the shaping of the industry. At the conference these were highlighted:
  • Most governments and incumbent industry players around the world are grappling with these issues. Where we do see leadership and innovation is in places where cities are still operating their own electricity networks. There are many great examples in the USA, where over 60 cities are involved in using their electricity networks to build smart cities. This is strongly supported by the communications regulator in America, the FCC. There are also some good initiatives from the local DSO within the Amsterdam Smart City project, who also presented at the conference.
  • Disruptive (often unexpected) developments from outside the industry based on innovations coming from companies – and their customers – operating in the digital/sharing/networking economy can result in rather rapid and massive changes that cannot be controlled by the industry, and most of the time not by governments either.
  • In cases of continual lack of national political leadership this will force the industry to step up its role in new developments. In some cases state and local governments are showing more and better leadership than their national counterparts.
  • Smart energy developments will increasingly be community/city-driven, with developments such as micro-grids, community storage, solar and wind farms, (smart/wi-fi-driven), LED street lighting.That is not to say that there will be a total demise of the traditional electricity industry, but the value chains will be totally different.So what could the consequences be for the industry?•       If the industry takes leadership, changes business models and starts developing new products and services for consumers, communities and cities along the lines mentioned above they can drive new innovations and chase the new opportunities.•       It is highly unlikely that we will move to a totally decentralised energy environment – so there will remain a significant centralized infrastructure to the industry, in which case given the absence of innovative leadership, the industry will become low value wholesale providers to the new innovators and those developing new energy business models.There is no doubt that in general the industry will survive; however the question is what will their role be and what value will they be offering to their customers and their shareholders (whether private or public).
  • Paul Budde
  • In reality the incumbent industry is in many cases facing an uphill battle. Large investments are needed in new business models based on new and innovative technological developments (renewables, batteries, micro-grids, smart cities, etc) while at the same time revenues are declining. The natural tendency is to then cave in, protect the incumbent business, and try to stop changes which undermine their old business model. (Similar to developments that saw the demise of Kodak, Nokia, and many casualties in the music industry, publishers, telcos, book industry, etc).
  • •       If they don’t take leadership the development of smart buildings, smart homes, smart communities and smart cities will happen anyway and the new opportunities will largely bypass the industry.
  • Several scenarios were suggested at the conference in Italy:
  • It is interesting to draw a parallel with the telecoms industry here. Twenty years ago companies such as Telstra and AT&T (USA) warned their governments that allowing for the ISPs/internet market to develop would lead to a meltdown of the telecoms network. The telcos still exist but in relation to market capitalisation companies such as Google, Apple, Microsoft, Amazon, Facebook, etc are many times larger, with most of the value-added revenue flowing to these companies, while the telcos simply operate the underlying networks.
  • Disruption is happening and the challenge for the industry is to run with it. However in some cases it is hard for the industry to take a leadership role because of current government policies, regulations and its own outdated business models. So changes, innovation, new business models and new value-added business opportunities will arrive from outside the industry. Some of the electricity companies will be able to break through this and participate and thrive in the new digital sharing and networking economy.

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Dutch trains to run on wind power

A new energy contract between power company Eneco and Vivens, an energy procurement joint venture has been signed. Under the contract, all traction power for the Dutch railway network will come from wind turbines Starting this year about half of the electric trains in the Netherlands will run on wind power. But the contract between railway companies and power suppliers aims to push that number higher. The agreement will see the trains running completely on wind power by 2018. The energy will be generated from wind farms within the country but also in Belgium, and nearby Scandinavian countries.

For more see here

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Special report on Smart Cities

This July, 40 of the brightest minds from government, business, academia and civic society gathered to exchange their ideas and views at the inaugural Smarter Cities Roundtable, hosted by ABB and Eco-Business and supported by the Singapore Economic Development Board and Future Cities Laboratory.

In creating smart cities, where are the biggest business opportunities and what are the key challenges in bringing the vision to reality? Download the report here.

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How smart grid and demand response could fit into the clean power plan

The fundamental drivers of the Clean Power Plan’s push to reduce greenhouse gas are less dirty energy and more clean energy. While these are a potential boon to wind and solar power, they could also provide a boost to technologies that can help integrate renewable energy into the grid as a means to its end.

The recently released final plan of the Environmental Protection Agency asks for technologies such as energy storage and demand response, as they can help facilitate the boost in wind and solar power that is likely to be a part of many of the US states’ compliance plans. The technologies broadly fall into two main categories, the first are those that directly affect the transmission and distribution portion of the grid, and the second are those that reduce end-use demand.

For more information, see full article.

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Batteries on wheels: ‘vehicle-to-grid’ technology allows electric cars to store energy

The world’s first mass market ‘vehicle-to-grid’, which allows electric cars to act as a huge battery, was launched at the 2015 Geneva International Motor Show.

The ‘vehicle-to-grid’ technology, or V2G, allows electric car owners to not only plug into the grid to charge their vehicles but to also feed and sell energy back at times of high demand. In a future smart city, idle cars could act as a huge battery and help to stabilise the energy supply and even provide backup power during blackouts. Electric car owners could also use the energy in their car batteries for themselves, with V2G becoming ‘vehicle-to-home’ (V2H). A V2H system could supply an average home’s energy demands for around two days.

Endesa, a Spanish energy company, and Nissan, a manufacturer of electric cars, are working together to bring the first commercial bidirectional charging units to Europe.

For more information on the V2G technology, see full article.

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A culture shift gains momentum in the century-old utility industry

Opower, a US utility, held its annual summit in Florida earlier this year. When the company first launched eight years ago there was one chief customer officer in the entire US utility industry – there were 26 chief customer officers in attendance at the annual summit. The increase in chief customer officer numbers is not only an indication of the utility’s growth, but also of the industry’s transformation. The position of customer relations has moved up the ranks and the customer programs that were once viewed as a drag on a utilities’ bottom line are now seen as being profit generators.

New product offerings are helping utilities improve their customer service. A recent Accenture survey of 11,000 power consumers in 21 countries found that 66% of respondents are interested in products and services to help them save electricity, up from 56% last year. The majority said they trusted their utility to inform them on how to optimise their energy consumption.

For more information on the culture shift in the utility industry, see full article.

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Community shared solar power

Smart cities are always looking for ways to become cleaner, more efficient and more secure. One way may be to transition to local renewable energy resources but unfortunately, the density and location of most cities do not lend them to most forms of renewable energy.

An exception is solar energy although many cities do not have the space available to host utility-scale solar photovoltaic projects. How can smart cities take advantage of solar energy? The answer is community shared solar.

Community solar as defined here is a solar photovoltaic project that delivers energy and/or economic benefit to multiple customers. These customers subscribe to the solar project by purchasing a share of its energy output. This allows subscribers to benefit from a central commercial-scale solar plant through virtual net energy metering, an arrangement through which multiple customers are credited for a share of energy generated by a renewable energy facility that is not physically connected to their property.

While community solar is gaining traction throughout the country, there are a number of barriers that need to be assessed and addressed before developing a new community solar program. These include:

  • Project economics:
  • Customer acquisition:
  • Financing challenges:
  • IT/OT system barriers:
  • Policy barriers:

Although potential barriers should be assessed, the benefits of community solar could be great in accomplishing multiple goals of a smart city.

For more see here

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