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  • Zviya Baron

The Democratization of Electricity

EmpowerTech Series


New Technologies are Shifting the Power (by all means) to End Users and Customers questions the Role of electricity Utilities in the Future

 

By Zviya Baron, Energy-Tech. Business. Partnerships. , Sep. 3, 2023


Introduction

Electricity was once exclusively generated, transmitted, and sold by a handful of large utility companies. The system was vertical, centralized, and designed with high entry barriers, leaving individual households as mere consumers. Today, a paradigm shift is underway, driven by technological advancements, regulation and policies. In this evolving landscape, anyone can become a producer, an energy “storer”, and even a trader of energy; in short, a process of energy democratization shift is happening as we speak.

What’s driving this change? This article will explore some of the technology trends that fuel this amazing transition.



Generated by Ideogam, Sep. 2023

What Virtual Power Plants Really Mean for Customers/End-Users

A Virtual Power Plant (VPP) is a cloud-based system that pools various smaller energy sources. Think of it as a remote control center that turns individual power generation systems into an orchestra of contributors to the power grid. This decentralization empowers the consumer to participate in the broader energy market. Companies like AutoGrid (https://www.auto-grid.com/solution/virtual-power-plant/) and Generacgs (https://www.generacgs.com/) have stepped in to offer advanced platforms to manage these resources.


The Smaller, the Better: SolarEdge's Role in Nano-Grids

SolarEdge, especially known for its innovative inverters, is doing some work in democratizing energy at the nano-grid level. Their new technology —allows for better efficiency and flexibility, enabling businesses to become an energy contributor producing renewable energy, handling EV energy (G2V, V2X) on the one hand and managing demand and market response on the other (https://www.solaredge.com/en/products/services/grid-services) .


Your Neighborhood is Your Power Plant

In the landscape of energy democratization, energy communities emerge as decentralized entities capable of producing, storing, and distributing electricity within a defined locality. Comprised of interconnected households or businesses, these communities represent a shift towards grassroots energy management. The infrastructure is increasingly supported by technological innovations like blockchain. Blockchain enhances the transparency and security of big amounts of data, i.e. energy transactions. Companies such as Enel and Engie (the Italian and French utilities) already use blockchain in metering and billing. Another interesting example is LO3 Energy (https://lo3energy.com/grid-edge-accounting/) which is utilizing blockchain to facilitate complex energy exchanges, providing a secure, transparent ledger for community-level transactions.


How Deregulation Fuels this Revolution

The deregulation of the electricity sector serves as a pivotal mechanism that has accelerated the democratization of energy. By dismantling traditional regulatory barriers and opening the market to increased competition, deregulation has engendered an ecosystem where innovation can thrive. This policy shift has been instrumental in enabling companies discussed above to develop and commercialize consumer-centric technologies that contribute to decentralized energy systems.


What Does the Future Look Like?

So, what does all this mean? In the near future, your home could be part of a VPP, your neighborhood an energy community, and your power needs could very well be met through nano-grid and micro-grid systems. What does that mean for electricity utilities? It certainly means one thing: it's time to rethink business models.

New Technologies De-Centralize the Energy Value Chain and soon will make current utilities' business models obsolete



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