It’s time to get smarter. By Ram Ramachander

The energy industry faces a significant challenge – how to meet increased demand and simultaneously decarbonise. Global energy demand is predicted to grow by over two per cent per year up to 2025 and to a total of 55 per cent from 2015 levels by 2040, driven by an increase in urban populations. At the same time, the ambitious COP21 agreement – where the international community agreed to limit the global temperature increase to below per cent degrees – requires a transition to clean energy sources.

To solve this challenge, government, private companies and consumers need to work together to embrace smart technology. Although our energy systems have already begun to get smarter, more must be done to ensure future generations can enjoy the highest standard of living possible.

A smarter grid
It is widely agreed that the current energy grid system is not fit for purpose. First developed centuries ago, it is difficult to integrate renewable energy, and a lack of transparency on the distribution side leaves consumers in the dark about their usage.

To tackle these issues, grid operators must transform the existing infrastructure into resilient smart grids. This means adding sensors and remote controls to the system. These devices, collectively known as the Internet of Things (IoT), facilitate automatic reactions to supply and demand, integrate clean energy sources and allow utilities to monitor the network for faults. These changes make the grid smarter, greener and more efficient. The value of a successful smart grid can be seen on Maui Island in the State of Hawaii where a smart grid project is integrating green energy and providing customers (utilities) with the data they need to manage their own electricity grid operation.

Responsibility for developing a smarter grid also falls on the user. Consumers must engage with the roll out of smart meters, which will be installed in 65 per cent of households globally by 2025, in order to understand, and ultimately lower, their own energy usage.

Storing up options
In tandem with the development and implementation of smart grids is the rise in battery storage. Battery technology, which is vital to smoothing out the intermittency issues of clean energy sources, requires research & development investment from government and private companies to reach its potential at scale and in a range of applications.

One of the most exciting areas of battery technology is the role it could play within an electrified mobility system. With almost 20 million new electric vehicles (EVs) predicted to be on the road by 2025, the use of vehicles as batteries would be a breakthrough for cleaner energy.

An example of private companies investing in R&D is the joint ENGIE, Mitsubishi and Hitachi EV charging project taking place at ENGIE’s headquarters. Using Hitachi’s innovative vehicle-to-everything charger, the test project is not only able to recharge an electric car, but can reverse the direction of the energy back into the building or grid it is connected to. In addition, solar panels and external storage can be connected directly to the recharger, which allows for an efficient supply of renewable-generate to buildings. This technology means that it would be possible for consumers to use their EV as a personal battery, solving intermittency issues that result from renewable energy dependence.

Block out the diary for future energy
Allowing a consumer to create and trade excess clean energy with a neighbour could significantly reduce both demand on the grid and the use of carbon intense fuels. To make this a reality, blockchain – a ledger technology designed for peer-to-peer transactions which is visible to all users in a network – could provide an answer to the tricky question of making payments secure without the involvement of a third party.

This technology has been used successfully in both Brooklyn and London. In New York, the Brooklyn microgrid project involves residents with solar panels selling excess energy to their neighbours, via the microgrid. This technology has been in operation for more than a year, and members of the community are now ‘off grid’. Removing their need to interact with a traditional energy supplier; only their closest neighbours, has increased efficiency and removed their dependence on fossil fuels.

The blockchain project in London, which made its first successful trade on 17th April 2018, was developed by Verv, an intelligent provider, as part of Ofgem’s Sandbox initiative. This project involved residents of a Hackney Council estate in east London sending their excess solar energy between housing blocks. The project is an example of a private company partnering with a regulator to test an innovative service and business model, demonstrating the power of collaboration between stakeholders.

Co-creating the future energy system
Overcoming the dual challenge of increased demand and decarbonisation, using smart technology requires collaboration. No single stakeholder can deliver the change required within the timescale it is needed. Research shows that co-creation is a crucial strategy for any organisation that wants to deliver true value through innovation – for the business, for their customers, and for society at large.

Bringing stakeholders, such as customers, suppliers, academic institutions, NGOs and government agencies directly together into the development process, will ignite innovative thinking and will overcome the complex energy challenge facing our world.

Hitachi Europe Ltd
Ram Ramachander is Chief Digital Officer & Chief Commercial Officer, Social Innovation Business at Hitachi Europe Ltd. Hitachi, headquartered in Tokyo, Japan, delivers innovations that answer society’s challenges, combining its operational technology, information technology, and products/systems. The Hitachi Group is an innovation partner for the IoT era, and it has approximately 307,000 employees worldwide

For further information please visit: www.social-innovation.hitachi/eu/about/white-papers/digitalenergy