The findings of the IDC study show that the Internet of Energy (IoE) could deliver very significant benefits, but its success depends on its ecosystem of participants, including governments, eliminating a series of hurdles related to regulation, imbalanced incentives, and integration (devices, data, communication, etc.). If key IoE stakeholders fail to address these challenges to create a unified and coordinated front, consumers and prosumers, the fundamental enablers of IoE, will struggle to understand what is in it for them, and consequently the adoption of IoE technologies and the rise of active homes will suffer.
If the ecosystem succeeds by collaborating through an IoE subsystem, then the IoE will be able to deliver 102GW of residential demand-side flexibility by 2025. To unleash this potential, IoE stakeholders should consider the following key takeaways:
- Converge around the active home platform. The IoE ecosystem is unfolding and stakeholders are overall still unsure which role they want to play. Consolidation is already underway, but further consolidation is expected. According to IoE executives we interviewed, few key stakeholders are needed, each with clear roles and responsibilities. It is widely believed that consolidation will occur around the providers of the active home platform. An attractive platform will be one that third-party stakeholders want to leverage to engage with their customers, and has the greatest potential to scale quickly. The advantages of open source and open standards are increasingly evident.
- Make it worth it for consumers and prosumers. Consumers and prosumers have no real interest in the IoE or active homes. What they are interested in is far more basic. The mass market is specifically interested in what’s worth investing in. Consumers and prosumers need to be provided with a product or service offer that is simple and convenient for them. Additionally, the financial structures of the offer need to be rewarding for them, and everything should be fully automated.
- Rationalise regulation and incentives. Incentives and regulations need to be designed to reward flexibility and end-user buy-in, actively addressing the risks of an unbalanced energy system that limit the ability of the industry to deliver smart and flexible grids. Governments should do their part in encouraging the development of active homes — both new build and existing stock — in the same way they are incentivising the adoption of electric vehicles.
- Unleash the power of data. Data monetisation is considered a key benefit that the various IoE stakeholders aim to tap into. For data monetisation to become a reality, all-encompassing and secure data platforms need to be created. To reap the most benefits, a data platform should be open source, so that third parties may also identify and offer additional value-added services.
- Prioritise data protection. Data security is always of paramount importance when handling consumer data. A key task for the active home platform provider is not only to protect its data assets and operate securely, but to get its ecosystem of IoE partners, as well as consumers and prosumers in general, to trust that they will protect their interests. This requires external audits, clear protocols in place in the event of a data breach, and transparency in communication.
This blog has been extracted from the whitepaper “The Internet of Energy – Enabling Residential Demand Management” produced independently by the IDC (International Data Corporation). You can download a full version of the whitepaper here.
If you would like to explore the topics discussed in this white paper in more detail, please contact geo by phone on +44(0)1223 850 210 or by email at firstname.lastname@example.org.