Today the energy sector is focused on the command and control of assets. Seemingly demanding they must have the ability to turn on/off up/down to enable demand shifting, which facilitates decarbonisation and cost reduction.
Industry has already been doing this for decades with large scale storage assets, classically with pumped hydro stations and more recently with grid scale batteries. So far these assets have been dedicated to and contracted directly by the energy industry for the sole purpose of balancing supply and demand.
The key data points (relative to time and location) used to control these large scale assets are typically:
- Cost —what is the cost associated with an action.
- Carbon — will this action reduce overall carbon (or minimise it)
- Load — can this action be performed within the capacity of the energy network the assets are connected to
Today we see the energy industry reach further with this same model of control, but now the assets they are reaching to are no longer dedicated to the industry but consumer assets supporting our daily lives – our electric vehicles, our domestic heating systems and ultimately our fridges, freezers and washing machines.
The primary roles of these assets are to service our needs, enable our freedom to move, keep us warm and support our preferences and our rights. Enabling direct control by a third party is a recipe for disaster regardless of what safeguards or security is put in place.
How could any energy company ever hope to understand the complex needs of the consumer and the optimal behaviour of millions of asset classes that at consumer energy in their homes? There are billions of consumers, trillions of assets and probably a googolplex of dependencies, preferences and relationships to be considered. It is simply an unmanageable approach and doomed to failure.
Further more, consumer trust in energy companies is at an all time low, rightly or wrongly energy companies have lost the trust of consumers through poor customer service, billing errors and, most recently, rocketing energy costs and excessive profits. If the energy companies can not get these basic functions right, can we trust them to heat our homes, fuel our vehicles or wash our clothes when needed?
There is another way, a way that creates the same outcomes for the industry without the need for direct control over assets.
As described above the needs of the energy industry can be described with three relatively simple data points; cost, carbon and load. By sharing this data openly with assets, the energy system can inform and influence assets to act in sympathy with the energy system’s needs.
Here’s the data, please act responsibly
This inform and influence principle puts both the consumer and the asset manufacturer in control, giving the consumer the ultimate control over their asset through the decisions they make.
The manufacturer is the expert of the assets they create, they not only know the optimal behaviour for that asset to function in the way it was intended to but also are best positioned to understand the usage and needs of the consumer. With this they can, and are, providing the most appropriate options for the consumer to express their preferences on how that asset should operate while maintaining safe and optimal operation. The relationship between consumer and manufacturer has always been one of trust, I trust my Bosch washing machine to clean my clothes, I trust my Samsung fridge to keep my food fresh, my Deakin heat-pump to keep my home warm and my Tesla to take me to work.
This model also supports consumer choice, not only through the preferences they express through the manufacturer’s asset user interface but also when selecting which model to buy. Where some manufacturers may provide a rich and detailed control experience to the consumer, others may provide a completely automated behaviour. The consumer can make this decision at the time of purchase.
Through this inform and influence model, manufacturers also protect their brand and reputation as “bad decisions” can never be forced on them by external controllers. Ultimately protect the consumers needs and experience.
Finally, directly controlling millions of devices introduces massive security and privacy challenges that could not only inconvenience consumers but threaten the entire energy system. Using the inform and influence model, devices can make their own decisions on how to act responsibly based on the data they receive within each device or device ecosystem. Each can operate unique decision processes using unique change schedules to counter any common attack vectors that could affect any significant portion of the live assets.
But how does the energy industry know if devices are behaving?
Whether we use the command and control model or the inform and influence model, the only absolute way to discover if the model works is via a feedback loop. If devices are told or asked to reduced consumption, only by measuring the reduction in consumption can success be determined. The energy industry already has the core tools to discover this through the mass deployment of smart meters and other energy sensors throughout the network. These systems provide both real time and empirical data on outcome of actions, regardless of whether those actions being influenced or commanded.
There will likely always be a need to have dedicated assets to perform the final balancing of the energy system but the scale, and therefore cost, of this need will be determined by how successful the behaviour of millions more assets can be changed.
The expectation that the energy industry may exercise benign, unilaterally control millions of energy assets is a fallacy regardless of what controls and safeguards are in place. Without the insight and experience of every manufacturer of every product working in partnership with their customer base it is simply impossible to create an effective solution. Therefore we must act now to abandon the futile pursue of control and work towards influencing better and more informed behaviours.
Matthew Roderick, is the founder of n3rgy.com and actively working with a wide variety of energy sector innovators. Previously CTO of SmartDCC, the heart of Great Britain’s Smart Meter rollout and M-PESA, the world’s most successful digital money service in developing markets
This article, written in association with Flatpeak Energy, first appeared here