The Internet of Energy is coming

AI will be at the heart of the new age for the industry, says Dr Nazmiye Ozkan.

The Internet of Energy is coming, a host of disruptive technologies that will mean new business opportunities and competition for traditional generators and suppliers.

At the heart of the new age for the industry will be artificial intelligence (AI): tools that can crunch and analyse the barrage of ‘big data’ from energy consumers on one side, and the growing range of sources of power and generation on the other; making sense of what is happening now, what might happen next and what decisions need to be made.

The question is, does the industry have the senior managers able to see and take advantage of the new digital energy context, the insights from data, and make the most of collaboration with technology innovators?

Within the next ten years there will be many more individuals, network groups and entire communities capable of generating and sharing their own energy. In recent memory the UK had just four established TV channels and a small number of national newspapers, all of which are now just one part of a huge array of media, mainstream and specialist, providing all kinds of choice and diversity. The same will apply to energy. Transactions via blockchain will allow individuals to ‘sell’ their own energy, harvested from solar panels, to friends in another part of the country – not just back to the grid. Manufacturers of cars and appliances such as washing machines and refrigerators will be able to sell their own energy as part of their deal: a guaranteed 10,000km from an electric car each year; five washing cycles a week.

And the nature of the data-rich environment, illuminated by insights from AI, will mean more consumers becoming active in their engagement with energy systems. No more just ‘on’ or ‘off’. For example, they could take advantage of buying cheaper energy at off-peak times, dipping in and out of different supplies to get the best prices, and make more choices about the source of energy generation. There’s the potential for AI to help suppliers better understand and make more reliable predictions of consumer energy behaviours and preferences, leading to more tailored offerings and deals.

Other benefits for industry include being able to have a stronger understanding of the supply from renewables, so forecasting likely changes in the variability of wind and solar from particular locations, across different seasons; and being able to support maintenance planning and resources by predicting when assets are likely to be deteriorating or will fail.

Take-up of the opportunities from AI has been slow. The tech is there; some discrete projects have been started, with some industry discussions under way on how to optimise the UK’s electricity system, for example. Ultimately it’s a case of when the pieces will fall together in terms of external market pressures, commercial opportunism from new entrants, consumer demand and having established players willing to put resources behind a revolution in energy systems. The most likely push to the tipping point will come from the uptake of electric vehicles and mass electrification of transport, creating new problems from ­clustering of demand.

The sticking point to progress may be in culture and access to expertise. The need for – and benefits from – radical change have to be recognised first of all. That will take a shift in attitudes among leaders and managers. Then there’s going to be the need to get on top of data, finding a way to get access to the full picture across the supply chain, with collaboration between generators and suppliers. The industry as a whole will have to upskill around data analysis and management.

A challenge for the Internet of Energy when it comes, with all the commercial benefits and potential savings for consumers, will be ensuring it also includes measures to help with social equality. Groups less able to be flexible in their use of energy will be disadvantaged, and it will be important for the sector as a whole to show a lead in terms of social responsibility.