Utility of the future

Energy Efficiency

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13 March 2017

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Jürgen Ritzek

Energy Efficiency in industrial processes is part of the Demand Side Management of the energy markets. However, there are many developments clearly indicating that the time is over where the different parts of the energy market can just be looked at seperately. This even includes the supply side. Industrial energy use is connected to themes like smart cities and electric mobility on the on hand and e.g. Demand Response topics on the other hand.

Accordingh to the MITEI, the Utility of the Future study is the first of a new series of reports that is being produced by the MIT Energy Initiative (MITEI) to serve as balanced, fact-based, and analysis-driven guides to key topic areas in energy fora wide range of decision makers in government and industry. This study specifically aims to serve as a guide for policy makers, regulators, utilities, existing and startup energy companies, and other power-sector stakeholders to better understand the factors that are currently driving change in power systems worldwide. 

In the executive summary, the starting point is described as follows:

Important changes in the provision and consumption of electricity services are now underway, driven to a significant degree by a confluence of factors affecting the distribution side of power systems. 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.

There are 6 core findings highlighted

  1. The only way to put all resources on a level playing field and achieve efficient operation and planning in the power system is to dramatically improve prices and regulated charges (i.e., tariffs or rates for electricity services.
  2. The regulation of distribution utilities must be improved to enable the development of more efficient distribution utility business models.
  3. The structure of the electricity industry should be carefully reevaluated to minimize potential conflicts of interest.
  4. Wholesale market design should be improved to better integrate distributed resources, reward greater flexibility, and create a level playing field for all technologies.
  5. Widespread connection of distributed energy resources and smart appliances and development of more complex electricity markets increase the importance of cybersecurity and heighten privacy concerns.
  6. Better utilization of existing assets and smarter energy consumption hold great potential for cost savings. At the same time, economies of scale still matter, and the distributed deployment of solar PV or energy storage is not cost-effective in all contexts and locations.

For more details behind this six core findings and the full report (360 pages), please visit MIT Energy Initiative website.

About the Author

Juergen Ritzek is co-founder and Business Director of EEIP