The shifts created by being data driven and how to compete in a shifting landscape.
The utility industry has been a pioneer within the IoT marketplace, implementing IoT solutions throughout the supply chain. However, new EU regulations are shifting the way electricity is managed and supplied, which has resulted in new challenges that utility companies will have to meet.
Just a few years ago, the EU announced a new plan to help bring more efficient energy usage to the utility industry with specific targets and goals - unlike the UN, who’s 2030 development goals on renewable energy have so far remained vague. This plan focused on both energy efficiency and renewable energy. The EU put regulations into place during this plan that require utility companies to ensure that 80% of consumers have smart metering systems, while also being required to get 20% of their energy from renewable sources.
Both of these requirements have to be met by 2020, which left the utility industry with little choice other than to start deploying smart meters as quickly as possible. While smart meters have been around for a few years, this push in the EU has contributed to well and truly bringing the market to life.
But that’s not all. The EU has other goals for a renewable future, and while the deadlines are a bit farther off, they still have major implications for the utility industry.
In the long term, the EU is aiming for a climate neutral economy, with 80% of all energy consumed coming from renewable sources. In fact, officials had pushed to further discuss the long term strategies in a meeting earlier last month (on May 9th, 2019) to discuss the best path to implementation of these ambitious goals, so these kinds of innovative policies are only expected to become more common as time goes on. However, this ended up not being a key discussion point of the meeting.
On this note, European Commision President believes that the EU should focus on 2030 climate policies first. In fact, the EU’s analysis has shown it is set on passing the 40% emission reduction benchmark by 2030, putting a lot of pressure on the industry to keep up with the fast pace.
In countries like Denmark, where renewable energy has been a priority for a number of years now, we've seen that it's possible for the energy sector to become at least 50% renewable without having to radically change the industry. In order to achieve 100% renewable energy production - which is the ultimate goal - it will require a fundamental transformation within the industry.
Relying on renewables: Will require a transformation.
One way that countries in the EU are starting to build towards more efficient energy practices is by trading excess energy supplies with neighboring countries, allowing them to adapt to changes in power demand. This method of balancing energy loads allows energy spikes to be managed and reduced much more efficiently. However, this model will become less effective as more countries strive to reach targets renewable over 50%.
Energinet.dk - See how and where Danish produce, import and export power to manage supply.
Real-time data is going to play a major role in energy efficiency as well. The ability to track factors that affect energy usage - such as the weather and usage conditions - will allow utility companies to better respond to the energy demands of consumers. Some utilities we meet believe that testing should occur every five to fifteen seconds, while others think once every fifteen minutes is enough when accompanied by predictive models using previous data. Where most networks agree, however, is that lower latency is needed to make testing a smooth and efficient process.
The networks that companies currently use to gather usage data (for example, mesh networks and narrowband PLC) face restrictions due to latency. In order to reduce latency, companies have to increase the number of routers and gateways they're using, which can make most efforts unsustainable.
While renewable energy is becoming an increasingly important trend within the utility industry, it is not a trend that is expected to go away anytime soon. EU regulations are continuing to move towards renewability, with a goal of 32% renewable energy by 2030.
Switching to a smart meter system will simplify the billing process used by most of the utility industry. Rather than having to read meters before sending bills out, bills will be able to be sent automatically, making things cheaper and more reliable. Similarly, smart grids created through M2M communication will provide consumers with better data, as they’ll be able to manage their own load balancing through dynamic pricing models.
M2M communication and automation: Devices run during higher periods of power generation for load balancing.
Utilities increasing the price for peak power consumption and offer very cheap or free power during off peak. It’s not a new concept as companies were already introducing these features in 2015. But required customers to adjust their lifestyle or pay more. Combining these methods with automated methods harnessing smart homes, smart grids and automation combined with renewable power and dynamic pricing will help shift utilities from supply-based load balance management to more demand-based models.
Renewable energy can be supplied by the utility players themselves. However, continuous solar and wind technology improvements, new long-term pricing models and government incentive schemes are leading to more people and businesses generating their own power. For example, there has been a surge of private rooftop installations in the Q1 of 2019 in Australia, adding 480 megawatts of power nationally. While this is just a small number of the total 229 million MWh Australia uses each year, it is a significant growth compared to recent Q1 periods.
The availability of Home batteries is increasing as costs decrease, means that storing power will compliment customer power generation and drastically reduce the time it will take to see a return on their private purchases. If managed correctly, it could also support utilities in their load management capabilities. For example, in sunny Arizona, consumers could generate and store 80-90% of their total usage within 3 years. While many places may not be to produce as much solar panel as Arizona, it will definitely affect utility current business models.
Decentralised: Already on the market are different solutions for residential power generation.
Utilities are currently struggle to find innovation pricing plans to meet these needs. Instead, they are often seen as competing against renewable energy market, instead of embracing it. Yet, as more customers adopt private energy generation, utilities will have to rely more on two-way smart grids and new business models and dynamic pricing that incorporates a more decentralised power grid.
Another challenge we have heard from different stakeholders that is facing new renewable energy efforts is the mix of new and outdated hardware. For example, some old power line concentrators aren’t compatible with newer models. This forces the contractor installing the new devices to drive around with multiple types of the same smart meter, installing the one that is compatible with network concentrator previously installed. This adds time and unnecessary supply chain management complexity to the process when adding new smart meters to the existing system.
Hardware that isn’t even related to smart meters can also interfere with the installation process. Some cheaper brands of TVs have been known to create noise in new smart metering systems, which adds extra time and resources that need to be spent on debugging, not to mention having to tell customers that they can’t use their TV while the smart meter is being installed. This can lead to disgruntled customers and even those who refuse to comply, making it harder to upgrade to newer systems.
Electric vehicles (EV) are creating new demands on the power industry. Vehicle-to-grid technology is one way of using electric vehicles to reduce energy consumption rather than add to it. Charging these cars during off peak will help but as more EVs connect to power grids, peak times may change.
One idea to counteract this challenge is called vehicle-to-grid (V2G). The idea behind V2G is to look at electric vehicles as power storage devices on wheels that help balance loads during peaks rather than just power consumption devices.
EV and V2G: Energy and peak times may alter as EVs become mainstream.
From this perspective, consumers can contribute their vehicles to the utility industry as an extra source of power. Electric vehicles will store electricity for the power grid, and deliver it to utility companies when needed and possible.
Not only is IoT bringing more of our world online, but consumers are also connecting more and more of their devices to the internet through smart home devices. These devices can keep track of information inside the home that's relevant to utility companies, like temperature and humidity. Being able to communicate directly with smart home devices would give utility companies a new avenue for accurately managing energy demands and offer better services to their customers.
An important aspect of smart meters that companies sometimes overlook is the physical location of the meters themselves. Meters can be located in all sorts of different locations on a consumer's property, including areas that are difficult for connectivity to reach.
Some companies have been attempting to use multiple providers in order to combat this challenge, sometimes bringing as many as three different SIM cards to a smart meter installation and testing which one worked best. This obviously isn't ideal, as it adds extra time, cost, and difficulty to every smart meter installation. In these cases, LPWAN connectivity can be used to solve this problem.
Using our experience with IoT connectivity, Onomondo is able to meet many of the unique needs that the utility industry is currently facing through a number of means.
First and foremost, Onomondo’s innovative commercial model means no more repetitive monthly fees. Instead, Onomondo only charges you for data you actually use. This means that you'll only be charged for the value our service actually provides you.
Onomondo also provides its customers with network depth. This gives you access to multiple networks that will improve the connection quality for all of your devices, giving you the dependable, real-time data you need.
Onomondo has complete control over its network, freeing it from partnerships with other providers. This means that your data only ever passes through our hands, giving you more control, flexibility, and security. Network control also allows you to reduce the size of the data being transmitted, cutting costs and power usage.
Onomondo empowers your business with reliable connectivity. We make use of cellular network infrastructure, which unlike other forms of connectivity, is an extremely reliable and developed infrastructure that's been tested and evolved over the years. This is especially important when dealing with critical solutions like demand management.
Permanent roaming means that no matter where your devices end up, they'll always be connected to our networks - even when roaming abroad. Permanent roaming is currently available for countries like the USA and China.
Onomondo uses point-to-point solutions when it comes to hardware, reducing the need to rely on different pieces of hardware from different providers. This means installation is a smoother, more predictable process, and future updates are more hassle-free since the infrastructure will be more flexible.
New environmental policy directives and renewable energy are rapidly transforming the way utility companies are connecting their devices. As global renewable consumption targets become even more ambitious, this is only likely to continue at an exponential rate. This change is a period of huge opportunity, but only with the support of the right connectivity partner. To find out more on how Onomondo can help you through this transition.
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