2011 Energy Smart Technologies Leadership Forum – The Results Book

Executive Summary

Even in times of economic uncertainty, there is continued recognition of the need for a smarter energy system – one that manages demand as well as supply; that runs on clean, distributed energy as well as centralised generation; that integrates variable as well as dispatchable power, and that can move us from fossil-based to electric mobility.

This special publication documents the findings of the 2011 Energy Smart Technologies Leadership Forum, hosted by Bloomberg New Energy Finance on 27-28 October in Lisbon, Portugal. The Forum convened more than 60 thought-leading experts in smart energy from international utilities, technology and service companies, government bodies, finance providers and non-governmental organisations.

Over two days, participants debated and discussed a series of critical issues that will determine how smart energy will transform the power sector over the next 10 years. Though uncertainty continues to plague the global economy, the Forum’s participants remain optimistic that the smart grid sector can thrive over the next few years and help to deliver a cleaner, more efficient and more cost-effective energy system.

But there are still plenty of building blocks that must be put in place to reap the benefits of smart energy technology. Below we list a few of the main lessons from the Forum.

•Investment in smarter infrastructure: The burden of investment in smart grid technologies will fall largely on distribution system operators (DSOs) over the next ten years. These regulated entities, historically tasked with low-risk infrastructure investments to maintain the grid, will need to embrace innovative new technologies and ways of operating their networks. Only new regulatory structures that incentivise DSOs to make these choices – and fairly allocate costs and benefits between consumers and utilities – will help to accelerate this transformation. Progressive countries such as Portugal and the UK are beginning to put such structures in place, and others will learn from them.

•Smart homes and consumers: There are many home energy management solutions available on the market today, but none has truly delivered on the full vision of a smart home at mass-market scale. There remains scepticism about how much interest consumers truly have in saving energy. Standardisation remains a major challenge, but in the long run, energy suppliers and other service providers must acknowledge that there will not be a single solution or ‘killer app’ for the smart home. Instead, different customers will want different offerings – many of them not related to energy – and choice will be paramount.

•Electric vehicle integration: There is not yet a single ‘right’ approach for integrating electric vehicles with the smart grid. With just a few EVs appearing on roads so far, there is still plenty of room for innovation around infrastructure business models, smart charging schemes, billing, roaming and ownership – and many different organisations that could play a vital role. As EVs ramp up, there will be a period of creative destruction as innovation occurs around each of these elements. It is still early days for this part of the smart grid.

•Fostering new business models: Experience suggests that reducing regulation is the most effective way to stimulate new business models and innovation. Today, restrictive rules govern many areas relevant to smart energy – distributed generation, demand response services, data access, etc. By removing barriers and allowing full access to energy markets, policymakers can pave the way for both new entrants and incumbents to explore new business models.

•Technology development: Technologies exist today that can deliver on the vision of a smart energy system, but there are still many opportunities for investment in further development. Energy storage is the best example, but continuing work on distributed-resource management, smart-home platforms, energy-efficient products and EV services are all of great importance. There is a thriving ecosystem of start-ups and technology firms taking up this challenge. Work on standardisation is also critical, but industry is beginning to understand that standardisation will always be a continuous process.

•Scenarios for multiple possible futures: Stakeholders in the energy industry must resist the temptation to focus on a single outcome for smart energy over the next 10 years. As it experiences a period of rapid innovation as well as great uncertainty, there are clearly many possible outcomes for the shape of the energy industry. The Forum’s scenario planning exercises led to the creation of four very different futures for the energy industry in European countries in 2021, each of which could be realised under certain circumstances. Most participants agreed that a high level of smart network investment and a high number of disruptive new entrants would deliver the best outcome for customers and society. Most also agreed that it is hardly a foregone conclusion that this will come to pass. Utilities, new entrants, technology providers and other stakeholders must be aware that there are multiple paths open to the industry, and be ready to respond to the signposts as they appear.

Please download the full report for more detailed analysis.

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