How tech companies are moving into the energy sector
From power generation and distribution to customer engagement, the entire energy system is moving towards digitization, decentralization and being data-driven.
This presents huge opportunities for tech firms to, for example, help build IoT enabled smart energy efficient cities and decentralised energy systems, where neighbours can trade self-generated renewable energy, aggregating and analysing new data provided by smart meters, addressing cybersecurity for critical infrastructure, and for creating a smart national grid for easier energy balancing and distribution.
Speaking at AI Expo Global last week, David Healey, smart energy director at WSP, said the private sector is the engine that will drive the necessary energy solutions.
Innovators in the industry are looking at technologies like AI to see how they can help the world meet sustainable energy targets and climate objectives. AI and blockchain enabled peer to peer networks are one way.
In April, VERV, a home hub technology company (team pictured below) developed by London-based SME Green Running, executed the UK’s first physical trade of energy on blockchain at a London social housing estate.
The system combines deep learning and AI to allow consumers who have renewable energy assets, for example rooftop solar and battery storage, to sell surplus power directly to neighbors on the platform via newly launched tokens called VLUX.
Another startup, Drift, classifies itself as a utility but doesn’t own any assets. Currently operating in New York, it acts like a peaker plant – power generating plants used to provide energy at peak demand – by engaging a network of small-scale producers on its platform to provide additional energy at a low cost.
Furthermore, using AI and other technologies the company says it can more accurately predict energy demand than traditional methods.
Some regulators are championing change within the energy sector driven by tech firms. In the UK, to encourage time of day pricing, where electricity price is high during peak demand and lower during flat demand to incentivize reduced usage at peak demand, the regulator is encouraging major tech firms to get involved.
Speaking to The Telegraph, Andy Burgess, associate partner at energy regulator Ofgem, said: “We want time of day tariffs to be commonplace by 2020. We will make this happen by letting other types of firms, for example, technology companies like Google or Amazon, to enter the sector and innovate.”
Many industry analysts expect the major Silicon Valley firms to make a move into the sector.
Amazon already has with its partnership with EDF Energy, a major European energy supplier, which trialed a smart home energy service, using Amazon’s Alexa and Echo technology, so customers could interact with the energy supplier by voice alone.
At AI Expo Global, Healey shared a quote from a 2016 MIT report that sums up what’s happening: “A variety of emerging distributed technologies —including flexible demand, distributed generation, energy storage, and advanced power electronics and control devices are creating new options for the provision and consumption of electricity services.
At the same time, information and communications technologies are rapidly decreasing in cost and becoming ubiquitous, enabling more flexible and efficient consumption of electricity, improved visibility of network use, and enhanced control of power systems.”
As already stated, the energy sector is undergoing necessary transformation to realize the low carbon future most countries are striving towards; digital-based tech firms are and will continue to play a significant role.
29 November 2023
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