An integrated energy policy that is inclusive and puts people at the heart of the energy transition will continue to evolve. Increasingly we will see market solutions that build on the diverse forms of energy democracy that are already being developed across Europe and North America.
As discussed in our first 5Ds blog – Decarbonisation of the energy system requires significant consumer engagement, system-wide digitisation, and regulatory reform. Energy and power supply systems have historically and predominantly been supply-led and the demand side relatively passive. However, increasing consumer engagement from both the environmental perspective and through smart connected appliances such as EV charging and electric heating will see an increasing shift from demand-side passivity to a consumer-led era that is cost and environmentally conscious.
Hansen discusses the energy transition in a three-part point-of-view series – dissecting the 5Ds in part 1 and a blog series looking at each ‘D‘ individually and how they are all interconnected.
Climate change is upon us, and the people want more than a shift, they want an energy evolution. With emerging and advanced technologies, renewable energy sources are becoming more accessible and cheaper to establish. Still, to transition to a system powered by 100% renewables we need to see energy democratisation and digitalisation take place globally.
Energy democratisation is about putting the power in the people’s hands – making the clean energy transition more equitable. To achieve accessible and affordable zero-carbon energy, we will need to utilize technology and digitalise the energy system by embracing a two-way consumer engagement model through cooperative renewable projects; implementing a system that is scalable and secure; and accurately combining all processes to provide a seamless customer journey from production to payment.
One-way to two-way flows of energy and information
The start of this democratised transformation looks at how energy is produced – instead of relying on commercial entities and fossil fuels, energy production has developed through wind, solar, and biomass projects that incorporate the community. These energy sources and community projects can utilize both consumers, as well as larger corporations, for energy production.
Traditionally, energy systems have been thwarted by one-way flows of energy from production to consumption. But now, systems are transitioning to an advanced grid system with two-way flows of information and energy – allowing for consumers, both commercial and residential, to participate in the production as well as the consumption of energy while feeding the excess back to the grid for external distribution. When consumers choose to produce their own energy, they then have greater control over how much they are using, their environmental impact, and can receive remuneration for their contributions.
These types of setups are a part of a community renewable program – many of which are developing worldwide. Increasingly we will see market solutions that build on the diverse forms of energy democracy that are already being developed across Europe and North America.
In Germany, Feed-in-Tariffs (FiTs) were introduced in 2000 – which are repayments to those producing renewable energy and contributing to the grid. Cities Wolfhagen and Hamburg were able to achieve remunicipalisation of their energy grids in 2006 and 2016 respectively. Both cities saw vast improvements in local economic democracy while saving large amounts of capital2,3.
The United States is a prime example of where Community Solar projects are becoming more common. Hampshire Power, a US-based solar energy company, is a model framework of a community renewable project. Hampshire Power, with Hansen CIS, enables people, property owners, and organizations to access solar energy to enable sustainable consumption.
Making Two-Way Flows Scalable and Secure
A future powered by 100% renewables is a grand goal – one that requires a large-scale system overhaul that remains secure from external threats. Municipalities will require a system that is scalable to their population size.
To begin, including consumers in the grid as energy producers, sources will need to be set up through infrastructure that supports two-way flows of energy.
The average home may not be equipped with solar panels and wind turbines, however, with the emergence of Distributed Energy Resources (DER), it will become increasingly commonplace for people to drive electric vehicles (EV) or use combined heat and power systems that can contribute to the grid, as well.
A simplified complex consumer experience
Just as renewable energy flows two ways in an upgraded system, so does a large amount of information. The data management and processing required to manage this amount of information is significant. A new system that can manage the load of two-way flows of data and energy and incorporate distributed energy resources (DER) while remaining agile and accurate is required.
A democratised system that includes equitable access to renewable, clean energy – one that incorporates both consumption and production use and cost, is scalable to the population, and can combine all aspects of data into one easy-to-read user interface and bill.
To continue the current momentum and realise a renewable future, consumers will need access to affordable resources. In 2020, the European Union announced the Green Deal – a set of policy initiatives with the overarching aim of making Europe climate-neutral by 2050 and becoming the first-climate neutral continent1. This goal has the potential to be realised through a democratised and decarbonised energy system. As these goals continue to be established globe-wide, policies will need to be reworked to create an equitable system that is inclusive to all.
In Spain, since 2015 citizens have pushed for an equitable energy system to overcome the increasing costs and energy poverty. City councils throughout the country are developing new municipal electricity companies, rewriting energy policies that ignite fairness, and renewable energy cooperatives are being contracted4. Community renewable programs will become a large part of the energy transition and finding ways to allow access to all is required to see a successful renewable run future.
“There’s no denying that the energy transition is quickly gaining traction, which means that a cleaner, more sustainable future is within grasp. But we have to make sure we do this in an efficient and inclusive manner – by putting people at the heart of the energy transition”5.
More on the Modern-Day Energy Transition
At Hansen, we believe that the future is one that will rely heavily on renewables and empower energy companies to become the next digitally driven experience company with our market-leading suite for Energy and Utilities.
To read more on the modern-day Energy Transition and predicted trends for the future, check out the Hansen Energy Transition Series 1-3. And the next blog in the 5D series – ‘Community Solar’ – A model framework for renewable energy.