Destination Net Zero

Why Digitizing the Energy Sector Makes Economic and Environmental Sense

By Tomas van Stee, CEO & Founder EnPowered 

 

The simple truth of the matter is that we are not moving fast enough to dampen, let alone reverse, the impacts of climate change. We all recognize the existential threat of climate change, and everyone wants to save money on their energy bills. This means that more large commercial and industrial energy users are looking to adopt cleantech to lower expenses and emissions, and fortunately, most of the technology we need to tackle climate change is already available

We may have the technologies we need, but how the energy sector is organized is slowing down the rate of cleantech adoption. We’ve spent the last century erecting a global electricity infrastructure based on fossil fuels, so any attempt to modernize and innovate runs up against resistance. Whether from entrenched interests or just the simple fact that grid reliability trumps everything else, this resistance prevents the rapid sea changes we need to preserve the environment. We need reliability and we need to innovate the electricity system without losing the stability of that system. Digitalization lets us do both.

When it comes to the energy sector, ‘digitalization’ refers to the ongoing and accelerating effort to give energy users access to their usage data, as well as helping them understand it, so they can make more informed decisions. At EnPowered we leverage digitalization for two main goals: 1) simplifying the complex world of energy prices, and 2) simplifying complex energy asset purchasing decisions.

 

Energy prices are complicated — digitalization can help.

Energy prices and electricity bills (with their multitude of charges) are extremely complex, and most large energy users lack the time or expertise to navigate obscure industry jargon. While other industries have provided energy users with highly granular, personalized data, our energy bills are still largely impersonal. By this I mean that they do not reflect the complexity and nuance of our energy habits, instead boiling down usage to a few line items at best.

The lack of actionable information in our electricity bills makes it harder to answer the two main questions that energy users frequently ask, namely, ”when is my energy more expensive?”, and ”when is it dirtier?”, i.e.. more carbon intensive. 

While tech like automated building control systems, industrial-scale batteries, and behind-the-meter generation solutions are increasingly being adopted, we lack the data insights to fully leverage the power of these assets.

Enabling automated price signals and responses (i.e., enabling your internet-connected energy assets to receive and respond to price changes) is priority number one because following energy pricing and demand in real time is a full-time job. In fact, we have employees at EnPowered whose very job is precisely that. The majority of companies will not have the means (or desire) to employ full-time energy managers; a smart, personalized, automated system is the only viable, scalable long-term solution.

Ensuring digital assets (e.g., building automation systems) are connected to the grid and each other will go a long way towards a greener, cleaner, more flexible, and more stable electricity system. The potential of digitization promises to seamlessly avoid peak pricing, shift to greener energy sources as they become available, and utilize energy storage.

 

Digitalization can simplify energy asset-purchasing decisions.

Dealing with market fluctuations and ensuring communication between assets and the grid is only half the battle for large commercial and industrial energy users. Equally important is giving these energy users access to capital to reduce risk. Good data can only go so far. Concerns over capital risks continue to stall energy efficiency and cleantech projects, often despite proven ROI. This is where EnPowered is looking to play a leading role. We aim to support energy users who often have no insight into after-the-fact savings once they have selected and installed an energy solution.

Tying these costs and savings together in a transparent, easy-to-understand manner is key to reducing consumer uncertainty and lowering the perceived risks surrounding solution purchases. For example, converting daunting upfront capital expenses into more manageable operating costs makes billing and performance monitoring more accessible. 

In addition, utilizing these future savings as a funding source opens the door to a wave of backlogged or stalled projects. For example, you could pay for an HVAC upgrade by leveraging your future energy savings. And once that project has been paid off, your energy costs will be even lower. This means you can create a positive feedback loop of lower costs leading to more savings and more projects undertaken, creating even lower costs. 

Many of these stalled projects (such as the lighting retrofit that has been repeatedly put off, or the battery that’s been on your company’s wishlist for years) get hung up on securing adequate capital or by hesitating and waiting for better energy rates. All this waiting costs energy users money since they could be putting those savings towards future upgrades.

 

Why we need to empower energy users and partners.

If these weren’t enough reasons to push for the digitalization of the energy sector, there is another norm that digitization can up-end: how users and partners interact with the grid. As things stand, we are not moving fast enough on climate change, in part because of an outdated view of the consumer-producer relationship. In other words, we need to move away from only having information flow in a top-down, one-way direction; namely, from producers to consumers, with little opportunity for meaningful dialogue. 

The enertech (energy technology) community has been talking about empowering energy users to produce their own electricity (e.g., installing rooftop solar panels) and to sell it back to the grid for over twenty years — in a word, to become “prosumers,” i.e., both producers and consumers of energy — but it’s only with the dawn of digitized energy that we are drawing close to fulfilling that promise.

Navigating energy markets, digitizing energy assets, unlocking stalled projects with funding from energy savings, and promoting prosumers: these are the challenges that EnPowered is tackling. But no one company can solve these structural issues alone, and we are always seeking to collaborate with like-minded organizations. Digitizing the energy sector will require an entire ecosystem of partners working in collaboration and establishing a virtual energy movement to bring about energy’s digital future.

 

Tomas van Stee spoke at Can the Four “D’s” of Electricity Disruption Get Us to Net Zero? During Destination Net Zero: Energy and Transportation Days. Read more about the 10 actions we need to take in the energy and transportation sectors in the next 10 years to get to net zero.

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