How might Decarbonisation affect the Energy Market?
In this second post in our series on Energy sector game-changers, Fujitsu’s Utilities expert Graeme Wright looks at the potential impact of decarbonisation.
Some changes – like the Internet of Things (IOT) – are driven by technology. But other changes stem from business, regulatory and social sources. Technology has a role to play in responding to challenges, so at Fujitsu we take a keen interest in all the forces for change. One critical driver for change in the energy market is decarbonisation.
Solar, wind, wave – alternative energy sources are making a big impact on the energy scene and the natural landscape. Reducing CO2 emissions and our dependence on fossil fuels is a big task, and one that still has a long way to go. But the real heart of the change is not the type of fuel used. It’s the impact of moving from centralised to decentralised – and therefore from “plannable” to “unplannable” – generation.
The existing energy infrastructure was not designed for distributed generation. Uncontrolled use of the infrastructure would cause mass disruption with parts of the network at regular risk of failure. Fortunately, we are actively managing this infrastructure for distributed use – but largely by constraining how much renewable generation is allowed at any one time in a location. This is not necessarily best for investors or the environment. But it keeps the lights on.
However, although the base load of generation may always come from central sources such as nuclear or clean carbon technologies, the more that distributed renewables are added to the energy mix, the greater the stress on the old infrastructure and processes.
New solutions are being developed and tested around the world to meet the challenge. These include ideas like smart grid, demand response, energy storage and time-of-use tariffs. All these approaches require a much greater customer focus on the part of all sector players – something that’s not been at the forefront of traditional industry thinking, which focuses on the “hard” issues of long-term asset management.
We can only manage the evolving energy infrastructure with the help of customers. Companies must welcome their customers’ interest in energy management. They need to engage, educate and stimulate customers – and offer them the tools and services that will help both suppliers and customers win. Companies must recognise that they now serve “prosumers” rather than passive consumers. Gamification is one strategy for empowering and entertaining customers while nudging their behaviour in desired directions. Online communities can also be influential sources of behavioural change and industry innovation.
Think of it this way: It’s not just the technical infrastructure that needs to adapt. The culture of the industry has to change too. And the culture will only change if we do different things.