03/04/2010 by David Slade.

The energy world is about to turn upside down. With the coming of smart grid, the electricity consumer customer becomes the electricity seller; the passive home appliance becomes the active energy manager; and the local 11KV DNO network becomes the power generation network itself.

Such an upheaval means that the energy world needs to start thinking about a new business model, says a recent report by IBM Global Business Services Energy and Utilities.

The fact that IBM is advising the energy industry is itself a point of interest, yet another signal of the new market opportunity emerging within the energy arena for information technology. This opportunity has drawn the attention of not only IBM, but also CISCO, Google and many others.

So how does IBM see the energy business model changing? First consider what it has been for the last century: a grow-and-build model. Utilities encouraged more and more consumption, and they built power plants and transmission to the far corners of the nation to serve the growing demand.

“The success of this strategy was remarkable. In the United States for example, from 1920 to the mid 1960s (excepting the period of the Great Depression), usage increased at seven percent annually – about five times the rate of usage of all forms of energy combined and three times the rate of economic expansion in general,” says the IBM report, “Switching perspectives: Creating new business models for a changing world of energy.”

But today we no longer need such expansion. The grow-and-build model is obsolete, yet continues to be used by utilities. As a result, utility stocks, which in the 1940s-1960s significantly outperformed the Dow Jones Industrial Average, now lag well behind.

Instead of expanding their territory, utilities are being called upon to change their product — to offer energy that is more efficient and clean and service that is more consumer-friendly.

Smart grid technology can help utilities meet today’s imperative. But it brings with it a new and complex relationship between customer and utility. This is because smart grid allows consumers to control energy usage via a home computer. With smart buildings into the mix and their appliances can control energy usage without the consumer doing anything. And with increased use of solar energy and other distributed technologies, the home also becomes power plant and storage facility for the electric utility.

“Companies willing to tackle industry model innovation and sit at the nexus of new complex relationships among business partners and customers will be well positioned to create and capture new demand for emerging products and services. Strong growth in revenues and profits – albeit accompanied by some risks – is achievable in multisided business models because of the embedded network economies of scale (i.e., margins increase with network size),” says the report.

IBM calls this new business model “a multisided platform.” What does it look like?

“Manufacturers, retailers and shoppers all benefit from having a single location where they can meet and transact business. A wider variety of stores and services brings more shoppers; more shoppers bring higher sales volumes for manufacturers and lower costs for retailers (and, in theory, also lower prices for shoppers). Thus, some element of network economy is bundled into the shopping center value proposition. The platform owner (the shopping center operator) extracts some of this value in the form of rent to store owners and, in some cases, service fees to shoppers,” says the report.

If indeed this is the future, it won’t be embraced quickly or easily by utilities, which are notorious for their caution. For those who do move forward, here is some of what IBM advises.

Be sure your current customer base is sizable enough to ensure that you get a meaningful head start.

But don’t hurry. History has shown that later movers may actually benefit from standing back from the first wave of early adopters.

Time the announcement of your new business model carefully to avoid shocking long-time constituencies or alerting rivals too soon.

But in the UK, the cat has already leaped out of the bag!

The UK Regulator - Ofgem’s duty to contribute to the achievement of sustainable development promoted this duty, placing it on an equal footing with its duties to meet reasonable demand and financing authorised activities. The principle objective, to protect the interests of consumers, refers to future as well as existing consumers. These changes underline Ofgem’s important and developing role in shaping the future of gas and electricity industries in a sustainable manner.The UK is facing a future that involves increased geopolitical risks to energy security, potentially higher energy prices and the need to do much more to reduce greenhouse gas emissions while making sure everyone can afford to adequately heat their homes.

While much of what is needed to deliver sustainability is not within the regulators direct control, a responsibility to facilitate change by engaging in the debate, trying to persuade relevant players to make changes where required and contributing information and expertise where it can.

Actions speak louder than words:

So whats already implemented in the UK?

• Smart metering (CoP10) with import and export facilities - Coming to every home in the UK - See my blog on smart metering for more information
• feed-in tariffs (FITs) for small-scale low-carbon electricity generation from 1 April 2010 - Customers own micro energy generation agreements connected to the local DNO grid - See FITs for more information
• Climate Levy Tax incentives - Look at you next bill and spot this tax!
• ROC’s - See my blog for more information
• REGO - See my blog for more information
• OGEMs - See my blog for more information
• REC’s - See my blog for more information

The next step:

• Informing the customer and proving ‘idiots’ guides to understand the available technologies and energy savings available.
• Providing engineering design  and installation solutions.
• The correct customer incentives to explore and implements these technologies.

Posted in Smart Grid Technology, Smart homes, smart meters, Smart Grid Maturity Model, Renewable Energy Certificate (REC), Smart Buildings, Renewable Obligation Certificates (ROC), Renewable Energy Guarantee of Origin (REGO), Renewable energy, Sustainability, Wind energy, Renewable tariffs, Small Scale Embedded Generator (SSEG), Renewable power | No Comments »

01/12/2009 by David Slade.

The cost of installing and owning solar panels will fall even faster than expected according to new research.

Tests show that 90% of existing solar panels last for 30 years, instead of the predicted 20 years.

According to the independent EU Energy Institute, this brings down the lifetime cost.

The institute says the panels are such a good long-term investment that banks should offer mortgages on them like they do on homes.

At a conference, the institute forecast that solar panels would be cost-competitive with energy from the grid for half the homes in Europe by 2020 - without a subsidy.

Basically everything (in the industry) is bound to grow still further. Growing further means less cost Heinz Ossenbrink, EU Energy Institute

Incentive programmes for solar panels in Germany, Italy and Spain have created manufacturing volume that’s bringing down costs. Solar panel prices dropped 30% last year alone due to an increase in output and a drop in orders because of the recession.

But Heinz Ossenbrink, who works at the institute, said China had underpinned its solar industry with a big solar domestic programme which would keep prices falling. There are large-scale solar plans in the US and India too.

Panels had been expected to last for 20 years and price calculations were based on this (with a free energy source, purchase and installation represent almost the entire price of solar power).

But Dr Ossenbrink says the institute’s laboratory has been subjecting the cells to the sort of accelerated ageing through extremes of heat, cold and humidity that has long been a benchmark for the car industry.

Long lifetime

It has shown that more than 90% of the panels on the market 10 years ago are capable of still performing well after 30 years of life, albeit with a slight drop in performance.

Dr Ossenbrink says 40-year panels will be on the market soon.

A key goal for solar is what is known as grid parity. That is the point when it is as cheap for someone to generate power on their homes as it is to buy it from the grid.

It varies from country to country depending on electricity prices, but the institute estimates that Italy - which has a combination of sunny weather and relatively high electricity prices - should reach grid parity next year. Half of Europe should be enjoying grid parity by 2020, it estimates.

Cloudy northern countries like the UK could wait further, possibly up to 2030. But the day would come when solar panels on homes would be cost-competitive without a subsidy, even in Britain.

Dr Ossenbrink says: “Basically everything (in the industry) is bound to grow still further. Growing further means less cost. Less cost means grid parity.”

“We have been surprised in the past five years at the drop in prices. It’s due to good incentive programmes first in Germany then Spain and Italy. That created a kind of a boom that was helping industry to reduce costs and get into profitability. And when an industry is in profit it drives on its own.”

Owning solar

Professor Wim Sinke, from Utrecht University in the Netherlands, who leads the solar umbrella group the European Photovoltaic Technology Platform, says the industry has even greater ambitions.

“The target of the sector as a whole is to reach grid parity in almost all of Europe over the next 10 years. So by 2020 we should have grid parity in most of Europe,” he told BBC News.

Key sticking points for domestic solar, he said, would be the lack of flexibility in electricity grids to take in surplus generated energy and difficulties with finance.

Dr Ossenbrink said: “What I would like to see is the finance sector saying solar power is a product like financing a house - except they can predict the value of the solar panel much more safely than they can predict the value of the house in a volatile market.

“Electricity will never be given away free. Banks should offer mortgages on people’s solar panels like they do on homes - the bank should own the panel, then it would transfer to the householder when the loan has been paid off. It would be perfect for life assurances.”

It will take much longer for solar to match fossil fuel power at the point of generation, the institute says, as wholesale electricity prices are much lower than retail prices.

From BBC web site

Posted in Photovoltaic (PV), Renewable Energy Guarantee of Origin (REGO), Renewable energy | No Comments »

04/06/2009 by David Slade.

An innovative project involving the installation of photovoltaic (PV) solar panels and renewable energy streetlights, as well as metering and data services, has been implemented in forty educational establishments across rural Northern Ireland.

Energy and advanced smart metering firm, PRI, is providing the metering and data services for this NIE Energy (NIEE) project, named “Switched on Schools”.

For several years NIEE has worked on an ad hoc basis with the five Northern Ireland Education and Library Boards in installing renewable energy systems at schools throughout the region. Supported with European funding, a program approach evolved for achieving a thriving, sustainable rural community in Northern Ireland via increased awareness of PV technology.

The award-winning Switched on Schools project made this possible, and has enabled schools to appreciate how valuable energy is as a resource and how energy bills and CO2 emissions can be reduced. Spreading the carbon footprint reduction message to families and friends, pupils gained an understanding about renewable energy and monitoring online their solar power system.

PRI supplied the energy data services for remote collection, analysis and billing from the Spring XP and GSM top hat meter in each school involved.

Company sales and marketing manager Geoff Chapman explains: “Our meter and energy data service solution records the amount of energy used in each school and provides historical data for trend analysis. Significantly, this information is relayed to a central point for monitoring and interpretation.”

Data is collected and monitored from the customer’s equipment. Received data is presented in a pre-determined format appropriate to customer needs.

Installation across the forty schools enabled them to claim money from the Renewable Obligation Certificates (ROC) system for the renewable energy produced. The NIEE generation tariff offers rewards for electricity exported back to the grid and ROCs.

Posted in Renewable Obligation Certificates (ROC), Photovoltaic (PV), Renewable Energy Guarantee of Origin (REGO), Solar PV, Education | No Comments »

04/06/2009 by David Slade.

Independent U.K. purchaser and supplier of energy, SmartestEnergy Limited, has launched a specialist renewable power retail service that can supply renewable and good quality combined heat and power electricity to business or local authority customers at prices competitive with traditional forms of power.

SmartestEnergy claims that for the first time, U.K. business customers can specify the exact fuel mix of the electricity they use – up to 100 percent renewable supply if desired. In addition, customers will be able to identify and specify exactly which technology and which producer they would like to buy from. For example, a business or local authority could choose to buy from renewable energy projects in their area to show their direct support for locally produced energy.

Jo Butlin, vice president for retail at SmartestEnergy said: “It’s quite clear that business wants to improve its green credentials but until now has never had the option to buy ‘green electricity’ in the same way that domestic users can. We are offering a flexible solution, from source to supply, where customers can specify exactly how much renewable power they want and which sources they want it from.”

SmartestEnergy buys its power direct from independent producers using a wide range of renewable technologies including wind, biomass, anaerobic digestion and landfill gas. Each unit of power comes with numbered Climate Change Levy Exemption Certificates (LECs) attached to specific power plants, along with a Renewable Energy Guarantee of Origin (REGO). These certificates prove the source of the electricity supplied and can be used by the business purchaser to highlight their green credentials to stakeholders.

SmartestEnergy has agreements with producers, covering more than 400 sites in the UK. Generators range from sub‐1 MW to 420 MW, enabling SmartestEnergy to deliver power from 1.2 GW of installed capacity, equivalent to nearly 10 percent of the U.K.’s renewable output.

Posted in Renewable Energy Guarantee of Origin (REGO), Climate Change Levy Exemption Certificate (LEC), Renewable tariffs, Renewable energy | No Comments »