Flexiwatts: A New Era of Energy Management

Can new strategies and technologies fundamentally change the way businesses consume energy? And how will these changes impact efforts to address larger issues like grid stability and energy reliability? Those were questions posed at a recent ‘Energy Revolution’ roundtable. The discussion, part of The Crowd‘s monthly forum, examined the evolution of energy use as utilities and companies become more intelligently wired.

Flexiwatts, interconnection & storage

In the drive to make renewable energy more accessible and cost effective, power providers are turning to dynamic, connected solutions. The National Infrastructure Commission (NIC) predicts a new era of smart power built around three key innovations: demand flexibility, interconnection and storage. In its report, NIC states that smart power could not only help the U.K. meet its 2050 carbon reduction targets, but save consumers up to £8 billion a year by 2030.

Demand flexibility, in particular, is a potential game changer. Also know as “flexiwatts,” it is an emerging concept that involves transferring energy consumption to lower-cost periods, helping to take pressure off the utility grid. By combining smart energy devices with time-varying rates, thermostats or appliances can shift use to a time when power is cheaper. At night when electricity rates drop, for example, electric vehicles could be charged or clothes dried with minimal inconvenience to individuals. The opportunity for cutting peak demand and costs increases exponential when the same idea is applied to commercial and industrial equipment and operations that consume massive amounts of electricity.

In addition, demand flexibility can support the integration of low-carbon generation such as wind, solar and hydrogen by addressing the problem of intermittent supply. According to NIC, in countries where demand flexibility is more commonplace such as Australia and the U.S., flexiwatts are meeting up to 15 percent of the peak demand for electricity.

Monitoring energy use in real time

The ability of interconnected devices to communicate with each other via smart sensors and metering means utility providers and energy management firms will, over time, obtain more granular data on customers’ habits and patterns. This can assist with targeted efforts to reduce energy consumption. For example, it could lead to initiatives to switch devices on and off based on occupant behavior. Users, in return, may get rewarded with credits on their energy bills.

Smart cities, specifically, are facing growing challenges around demand response. This, coupled with the rise of the “prosumer” — switched-on consumers and organizations that not only modulate and manage their energy use, but look to monetize it — means energy providers will increasingly need to find new ways to drive further efficiencies in their own operations and distribution networks while incentivizing customer loyalty.

As smart energy gets scaled up, the cost of interconnectivity should fall, offering further benefits for utility firms and their customers. Already there is evidence that smart meters are delivering significant cost savings for British households. Research from Smart Energy GB highlights that 52 percent of people with smart meters are seeing reduced energy bills, with 80 percent taking steps to reduce the amount of energy they use.

Being able to monitor energy use in real time ultimately enables more informed decisions —  actions that will help address supply and demand challenges. Getting closer to the end user to effect positive behavioral change will be key to ensuring these seamless solutions are optimized to best effect.

Contributed by Andy Dewis, VP International Solutions, Schneider Electric, Energy & Sustainability Services