Since the Internet went mainstream more than 20 years ago, it has been a disruptive force for good across countless sectors and industries - and it now has the potential to do the same for the energy system.
Against a backdrop of climate change and an urgent need to move away from fossil fuels, the way our energy is generated, distributed, managed, balanced, traded and the way we consume it is set to change beyond all recognition. Something that is being enabled by renewable generation, innovative new clean technologies and models of working, made possible by digitalisation.
The top-down, centralised power system we have so long relied on is transforming into a decentralised network comprising millions of devices and renewable generators. With platforms like the one we have developed at Kraken supporting this shift.
But there’s a problem.
As a company at the forefront of such innovation, we believe the full potential of the energy system of the future, risks being limited by the way industry continues to think, reference and pigeon-hole the new with the old. Now is the time for the industry to fully embrace and capitalise on all that a consumer centric and tech-driven system has to offer and limiting it is a dangerous path to follow, as we’ve already seen in many other industries. We have seen many examples of what happens when industries fail to realise the disruptive power of digitisation, think of Blockbuster / Netflix, Kodak / digital cameras and minicab companies / Uber. Except such disruption in the energy system could have costly implications for consumers.
A legacy of language
Nowhere is this problem better demonstrated than through language.
The electricity networks were specifically designed to solve the challenges that existed at that moment in time, over 100 years ago and have continued to grow following the same design philosophy. As we now enter what we have coined ‘the consumer era’ and move towards a decentralised system that has to rely on the consumer, new challenges call for newer solutions and a new perspective.
The energy industry is notorious for its use of acronyms and jargon, and it is becoming increasingly evident that the current glossary of terms that encourage technology providers to focus on one aspect of the value chain is no longer fit for purpose.
A number of terms are used to illustrate the same or similar capabilities. In the physical world, terms such as SCADA, ADMS, DRMs, DERMs, DROMs are used to describe the ability to connect to, monitor and control assets, while on the financial side VPPs are used to describe the monetisation of assets. Industry also uses aggregation to describe bringing assets into a VPP as a single unit.
We have acronyms within acronyms. Terms used to describe SCADA systems have expanded to include PPC, EMS and BMS. In essence, these systems are all responsible for undertaking the control functionality that serves to monitor, manage and regulate the safety and functionality of plant equipment. But, defining them as distinct offerings creates confusion among customers that are led to believe they need multiple scada like systems on a site, many of which have overlapping scope. Utilities typically use Advanced Distribution Management System (ADMS), Demand Response Management System (DRMS), and distributed energy resource management systems (DERMs) to monitor, control, schedule, and manage their portfolios of demand response loads (smart thermostats, water heaters) and distributed energy resources respectively (energy storage, solar, EV charging). But platforms should be able to do both. We should be encouraging a system that promotes balancing the demand side with the supply side, cutting out the need for multiple systems creating fragmentation and inefficiencies.
New terms, old thinking
So, why is the blurring and proliferation of new terminology with legacy systems an issue?
Applying these terms to the energy transition is encouraging technology providers to only focus on one area of the value chain, resulting in unnecessary layers of sub optimal integration of incompatible systems. It creates a lack of clarity, noise and a distraction from the capability actually required. Often resulting in additional expense, difficulty in procuring systems and conflicting scopes and functionality.
Kraken is a case in point. We have built out a flexibility platform that addresses the whole flexibility landscape from asset monitoring, management, scheduling, alerting, reporting, control to optimisation to achieve consumer desires, market potential and network protection. Calling what we have built a ‘virtual power plant’ is like calling your laptop a virtual typewriter. The term only captures a very limited capability..
The energy system of the future should be able to monitor, control and dispatch any asset, because it is going to require and rely on a plurality of assets, aggregation and disaggregation at the same time. It should also be able to optimise against any kind of problem or opportunity- whether from the market, networks or people’s consumption / generation and behaviour. To be able to do that, we can’t break the system into lots of component systems, while the system itself moves from centralised to decentralised, its nervous system has to have visibility of all its corners and be able to orchestrate it holistically spanning control systems, networks and protocols.
Summary
We are about to enter one of the most critical and challenging phases of the energy transition, where we will see the system undergoing its biggest transformation in history. Defining this new world of energy will require a huge overhaul of multiple aspects of the system and pigeonholing old terminology with this new way of thinking is hindering our progress.
We must learn from the experiences of other industries and recognise how we are limiting potential by tying the sustainable energy system of the future to the language and philosophy of legacy systems of the past.