Note to the Head of Companies: even if today it seems that your company is not involved in energy sector, there are all chances that tomorrow it may become a full-fledged part of your business. An example of this is Apple, a company that is not usually associated with this market. In the summer, Apple applied for licenses that will allow it to sell consumers the surplus of renewable energy generated by the company on its new headquarter, as well as at its facilities in Oregon, Nevada and California.
Of course, you do not have to immerse yourself in this business with your head and work with customers directly, as Apple plans to do. On other other hand, it is possible that you will want to join the ranks of so-called “prosumers”, that is, producing consumers, companies that not only consume but also produce electricity. The market is gradually moving away from the traditional energy production and distribution model, with local utilities providers having a monopoly on selling electricity in a certain region. In new, more dynamic market conditions, “prosumers” will be able to create and offer a variety of narrow-range products and services, for example current frequency adjustment.
Now these services are included in the basic set of services of energy suppliers, but in the future, advanced consumers will be able to independently produce them on their equipment and send them back to the power grid. Therefore, the monthly electricity bills will become the difference between the energy used and produced.
In California, Texas and most of the regions to the east and north of Chicago, wholesale energy supply markets have already formed, which sell early versions of these new products and services. Players of these markets receive their licenses from the federal authorities and are under their supervision. The bulk of them are utility providers and specialized energy producers. At the same time, there has been a trend towards the formation of small local markets, where the requirements for licensing are significantly reduced. It is assumed that this can attract a wide range of companies and even some participants in the housing market.
The main candidates for this role remain commercial and industrial organizations, due to their large size, high variability in energy consumption and the ability to handle large amounts of electricity. The most common way to produce local (or distributed) energy is solar panels installed on the roof. In the office buildings of companies, as a rule, there are roofs, parking lots and unused space, where you can place solar systems that cost less and exceed the size of the panel for residential buildings. According to a new study conducted by the National Renewable Energy Laboratory, the area of space suitable for placing solar panels in the business sector is almost 1 billion m², which is enough to satisfy 14% of the US electricity needs. Also, solar energy can be
purchased from companies specializing on its production, which will be much cheaper than purchases of other types of energy, while its surplus can later be resold.
However, this is only the first step towards the electricity market of the future. Many energy companies are already working in accordance with “demand management scheme”, which allows them to sell rights to a portion of their assigned production capacity. Therefore, they get the opportunity to earn while reducing their consumption during times of high consumption, when the cost of electricity increases. In the future, companies will not only be able to sell energy that they saved, but also other services that are not yet available, generated by their systems, buildings and even cars. For example, they will be able to sell part of the battery charge of their electric vehicles back to the electric company, if the latter needs additional capacity.
The principle of saving electricity with subsequent resale is partly a result of traditional investments in energy efficiency, which the business has been doing for many years. Installation of energy-saving lamps, engines and other equipment continues to pay for itself. These efforts bring obvious benefits, regardless of what scheme it takes: at the expense of the companies themselves or with the participation of intermediaries who provide capital for this, and then share the savings. At the same time, the rapid growth of “smart” digital and Internet technologies has led to the emergence of new forms of energy conservation, based on the constant and direct control of equipment. In the traditional approach, savings are achieved by simply replacing conventional devices with energy-efficient counterparts. At the same time, new devices operate in the same mode as the old ones, without any additional control capabilities. Now the company can remotely manage all of its equipment using special programs that track the current cost of electricity and, based on it, make decisions on the timing of performance of certain tasks.
The same programs can be customized in accordance with the principle of demand regulation, according to which a small amount of money is paid to the consumer for changing the schedule of his energy consumption. For example, one new technology allows to optimize the operation of air conditioners: this easy-to-install and IP-controlled device can turn millions of air conditioners on the roofs of shopping centers into an additional source of energy. Leading companies are increasingly not only buying large amounts of renewable energy from large suppliers, but they are also producing some of the electricity they consume. 53 international companies have promised to fully switch to renewable energy (however, exact terms have not yet been determined). It is 24 largest buyers, including giants such as Google, Amazon, Microsoft, Ikea, Equinix, Mars, Dow, Wal-Mart and Facebook, have acquired 3.6 GW of renewable energy since the beginning of 2015 – enough to supply electricity Half of Connecticut. How can leaders of non-energy companies prepare for a similar future – the simultaneous use and production of energy? The huge size of Apple, the scale of its energy consumption and enviable financial position allowed the company to get involved in this process faster than others. However, there are many opportunities to lay the foundation for the future transition, while saving money and helping the environment. To begin with, it is worthwhile to conduct a comprehensive audit of energy consumption with the involvement of a company qualified in this field. It should be familiar with the latest control technologies, traditional energy-saving methods (which are used in energy efficient engines and lighting), as well as the principles of demand regulation. This audit will necessarily reveal new opportunities for saving money and selling (or, at least, saving) energy right now. Some non-governmental organizations and business leaders, including the World Resources Institute and the World Wildlife Fund, also form coalitions that help companies acquire renewable energy. Probably a decade or two will pass before we completely switch to the “proconsumer” market model, however, the dawn of this era has already come, and Apple’s example is the best confirmation.
About the author. Peter Fox-Penner is director of the Institute for Sustainable Energy at Boston University