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E.g., 22/10/2017
Industry News

Digitisation, Data and Decentralisation

Catherine O’Kelly, Industry Development Director at British Gas, takes the stage at the British Institute of Energy Economics #isthereaplan Conference on UK energy policy for 2020

I’ve talked at the British Institute of Energy Economics (BIEE) Conference today about some of the amazing innovations that are bringing the energy future nearer. The Conference is looking out to the 2020s and asking #isthereaplan? I’d argue that there are three reasons to believe in the future: digitisation, data and decentralisation.

Digitisation and data

By 2050 the world will have 50 billion connected devices, putting customers in control in a way we haven’t seen before. This rapid technological change is elevating people’s expectations; they won’t settle for how things used to be. They expect more control and better service, and have become used to using simple digital platforms that make their lives easier.

From an energy point of view, the rollout of smart meters will bring energy into the digital age, allowing suppliers to offer a more personalised and flexible service. It will mean that customers have access to new propositions that have the dual benefit of helping people save money, as well as supporting the industry’s need for flexibility to smooth out the peaks and troughs in energy demand.

A leading example of this kind of proposition is the Home Energy FreeTime tariff launched by British Gas last year, which was the first tariff of its kind in the U.K., offering free electricity during the day on Saturday or Sunday. What we learned is that customers do move their usage to the free period. They also save money – the average customer cut £60 off their annual bill. We borrowed this idea from the U.S., where customers are now getting used to being rewarded for shifting their energy usage to off-peak times. Not far from now, this kind of innovation will be commonplace.

Bringing energy into the digital age means much more data – at least 17,000 data points where we used to get 4 – and much more insight to go alongside it. For customers, that means more understanding, control and convenience. Remote monitoring of boilers enables faster fixes; connected appliances mean cheaper running costs. Digitisation and data can make energy work harder and better for customers.

 

Decentralisation of energy markets

Instead of energy being produced centrally and then supplied to users, generation is becoming increasingly localised, to the point of self-sufficiency. In the future, the majority of electricity households consume could be generated by themselves or by businesses, public sector bodies and other homes, depending on market prices. This means a smarter, more flexible grid, that works better with increasing amounts of intermittent renewable power generation.

To help us understand how a virtual local energy market could function in practice, to relieve pressure on the grid and drive down energy bills, Centrica is working on a pioneering trial in Cornwall that will test the use of flexible demand, generation and storage across more than 150 homes and businesses. We’ll be installing smart meters, solar panels, battery storage and smart appliances, which will interact with the virtual marketplace automatically. 

What is fundamental for us is to understand how individuals and homes relate to these new technologies and ways of doing things. Our energy network will become more complex, but it shouldn’t have to feel that way to the people using it. We are building smart solutions for households that they find genuinely engaging, useful and simple to understand.

 

So #isthereaplan? Whether there is or not, digitisation, data and decentralisation do at least give us reason for optimism as we look into the 2020s and beyond.

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