The internet of energy: Australia’s future network

Australia’s future energy grid needs to be completely re-imagined if it is to keep up with evolving needs, an analyst says.

The current utility model underpinning Australia’s energy network is not sustainable and must be progressively reformed following the uptake of renewables, says Dr Zarko Sumic, vice president and IT analyst at Gartner.

Increasingly, the physical limitations of the traditional utility model will deem the current energy network futile – and by 2020 the largest energy company in the world will not own any network or generation asset, Dr Sumic told the Gartner Symposium on Monday.

“We will essentially have to reimagine the way energy provision works,” he said. “We believe digital utilities will emerge which will leverage platform business model to address current industry challenges.”

A digitally-enabled energy provisioning model organised around open infrastructure principles like the internet, known as the Internet of Energy (IOE) will drive the future energy network and keep the industry “viable and sustainable,” he said.

This IOE will involve the implementation of internet technology into energy systems to remove network limitations and will be driven by a democratised platform like eBay or AirBNB, he says.

“Think about an environment where energy sources can be accessed regardless of where they are and who owns them. All of these sources will have equal access rights via open infrastructure,” he said.

The future of the utility industry will be shaped by four main forces: decarbonisation, digitisation, decentralisation and democratisation, he says.

Dr Sumic argues that a new value chain is emerging in the energy sector as part of the move to clean energy, called Utility 3.0 – a shift towards “energy democracy” in which control and ownership is shifted from utilities to their customers.

“Utility 3.0 requires new energy provision and operating model, which is where the internet of energy comes in,” he said.

It’s this shift towards Utility 3.0, which could be addressed through an IOE, that governments must be considering in developing policy for future energy needs, Dr Sumic told Government News on the sidelines of the event.

He explained:

“The energy sector has existential importance to society and for that reason the government should be involved rather than acting reactively when things go wrong; they need to be proactive and explore this kind of business model. This would regain the viability of the utility sector.”

New capabilities like the smart grid should also be leveraged as part of this change “reinvent the way energy is provided to customers” he says.

This transformation towards an open infrastructure-based energy grid has already been underway for two or three decades, Dr Sumic said.

“Some regulators are already considering opening distribution network to all participants,” he said.

Dr Sumic pointed to New York’s Reforming the Energy Vision as an example. NY REV is a customer-facing marketplace that enables the flow of energy services and value across a distribution grid.

The NY REV integrates renewable energy generation with smart grid technologies on an electric grid to make it easier for citizens to invest in smart grid technology.

But if offline technology is embraced, providers should consider technology with capabilities like congestion management and distribution marginal pricing Dr Sumic says.

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