How Utilities and Consumers Can Join Forces to Power the Sustainable Future

By David Hall, Contributor

Since 1996, the World Bank reports we have massively reduced our energy consumption per capita from 3879kg to 2775kg oil equivalent. However, since 2014 progress has plateaued somewhat, and with some ways towards meeting minimum environmental goals, we have taken all the easiest steps towards greater efficiency and the need to shift our attention to significant minimal gains. Initiatives from the smart meter roll out to environmental levies peron suppliers are bringing attention to the way we generate and consume energy. Meanwhile in the retail sector, ‘all green’ energy tariffs from the likes of Bulb and Ovo are gaining market share. 

It’s therefore a bit of a shock to realise that the latest UK Environmental Accounts show that British consumers are now the country’s largest emitters of greenhouse gases (GHG). Overtaking the UK energy supply sector, they created a quarter of the UK’s GHG emissions in 2016. Clearly, the onus is shifting from big business and industry towards individual households to cut carbon emissions and use energy more efficiently. 

But the reality is that few British consumers are planning to change their ways. Schneider Electric research revealed that 16 percent of respondents – equivalent to about 10.2 million UK residents – have no intention of curbing their energy consumption. 

In a time of decentralisation and decommissioning, where powerplants are being shut down and the UK grid network is becoming more localised, through solar and wind initiatives, utilities and operators will need all the help and insight they can get to keep their networks balanced and operational running. If we are serious about conserving energy and improving our national efficiency, then utilities need to help their customers take a greater interest and responsibility in their energy usage. With the growth of offshore generation over the past few decades, more supply of local low carbon energy is available. 

It is in the interest of energy providers and operators to encourage the growing prosumer movement in the UK. Through financial incentives and the latest connected technology, everyday consumers can be turned into ’smarter’, more sustainable prosumers who can help balance supply and demand on the country’s networks.

Smarter Supply Or Consumption Control?

Reducing consumption does not need to be a tiresome inconvenience. All that is needed is that consumers make more efficient use of energy and explore well-established, increasingly affordable alternatives, such as LED lights and smart meters. Schneider Electric research suggests that 77 million lights, devices and appliances are left on or on standby every day in households across the UK. Clearly an impact can be had in encouraging consumers to be savvier and reduce the waste energy they expend.

Part of the solution lies with the country’s growing ‘prosumer’ movement. The term prosumer describes a growing number of energy users who are more proactive about how they measure, use and even generate the energy they consume. Recent Schneider Electric research was encouraging on this point. The data showed that roughly one quarter of respondents say knowledge of the energy usage per device or through the day from smart home devices e.g. heating and electricity monitoring would motivate them to reduce energy consumption. Modern energy prosumers want the reliable availability of power and technologies that gives them more control over their energy – how it is produced, how much they need and how much they use, with many producing their own and selling it back to the grid. 

County and city councils, community associations, businesses and residential homes alike are becoming proactive energy consumers, enabled by new, widely available technologies. By 2050, 44 percent of UK energy is projected to be generated by these prosumers. Sustaining and encouraging the movement should be a top priority both for utilities and consumers.

The energy diet should mean gaining pounds, not losing them

A consumer’s reasons for turning prosumer can be many, complex and highly personal. Yet, to grow the movement, we should also be incentivising conversion. Fortunately, British consumers are willing and open to such encouragement. Indeed, when asked what would motivate them to reduce their energy consumption at home, 42 percent of respondents cited financial incentives.

Utilities have been very successful at incentivizing homeowners to reduce energy consumption and generate their own.  As part of smart grid modernizations, programs have been launched or expanded that encourage energy customers to adjust their consumption in response to pricing signals, penalties or curtailment requests. 

Due to this potential flexibility, a customer’s energy consuming loads and any on-site energy generation capabilities are now considered important distributed energy resources (DER). At peak times, these are critical to helping balance the grid.

An increasing number of homes and businesses can also be encouraged to produce solar or wind-based electricity onsite. Many have moved to self-generation naturally either to reduce their carbon footprint or offset high grid energy costs. Yet, with the presence of government grants and support, uptake can be substantially boosted. 

By adding an energy storage system, energy prosumers can further maximize the self-consumption of this energy. It will extend their energy flexibility by gaining more control over when they are able to use it. Building their own microgrid in this way also gives consumers a green energy reserve that can keep critical loads or processes running during short-term blackouts. When demand is high, prosumers can also sell unused energy held in their batteries back to the grid, which utilities can make use of to balance their network. 

Utilities and Consumers Join Forces

For consumers, new, interconnected technologies can satisfy the desire for greater control over their energy usage. It can also turn them from passive into active participants embedded within the energy infrastructure. However, consumers must first be encouraged and empowered by energy suppliers, given the right information and tools, including the provision of advanced metering infrastructure (AMI), smart metering technology, and the implementation of automated demand response (DR) services. 

Smart meters serve as the first point of engagement for consumers and the utility, providing them with more information on their energy consumption across various interconnected devices. Knowledge is power and a strong motivator – 24 percent of UK consumers claim that having access to their consumption data would motivate them to be more responsible energy users. 

Smart meters also provide an easy way to participate in demand response programs. Demand response occurs when a grid operator identifies a consumer who is using a large amount of energy and asks them to limit their consumption – often through an automated process and usually in exchange for an incentive such as discounted prices.          

Taken together, these tools and services allow utilities to help their customers identify and implement energy-efficient projects to reduce their energy consumption and bills. This can provide utilities with a competitive edge, increasing customer satisfaction, loyalty and retention, reducing delayed repayments and creating new markets for potential services. 

Yet, they also enable providers to orchestrate and manage energy consumption. This includes increasing or decreasing demand where needed through lower pricing structures and automated DR and shifting loads to mitigate peak power. Ultimately, they allow utilities to provide more reliable power where and when it is most needed, as well as make better use of their existing assets while adding new low-cost systems to their portfolios.

It’s an old adage that still rings true: small changes can make a big impact. Having moved past the advent of low carbon energy generation, we are moving into an age where marginal gains will start to mean more and more for the future of the energy landscape, and our environment. Much still needs to be done, by both utilities and consumers. Yet without the everyday actions of prosumers, the crucial push to make such innovations happen may be lacking. 

David Hall is Vice President Power Systems, UK and Ireland at Schneider Electric. David joined Schneider Electric in 2017 from ENGIE where he was Managing Director for Business Energy.  Prior to this he held senior leadership roles within SSE, EON, Severn Trent Water, AES and RWE Npower. David is an electrical and electronics engineer and has spent much of his career operating in sales & marketing, business development and customer service roles across manufacturing, retail, service and project management sectors. Throughout this period he has led businesses operating within the Residential, SME and Corporate segments. David believes in driving a strong customer focussed culture throughout the business.

Hundreds of utilities are at DistribuTECH in New Orleans this week. Learn about the event here. 

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