The energy conservation measures include the installation of LED lighting, boiler plant and heating system upgrades, converting fuel sources from natural gas to electric heat pump systems, upgrading electrical distribution systems and installing a geothermal ground source heat pump system.

In addition, the project will replace natural gas clothes dryers with ventless heat pump dryers, install water conservation measures and upgrade building envelopes to be more energy efficient.

According to Ameresco, the energy upgrades are designed to save over $2 million in energy costs per year and reduce greenhouse gas emissions by more than 27%.

In addition to the environmental benefits, the project is expected to create 125 new jobs in the Edmonton area over the next two years.

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Ameresco undertook a comprehensive project evaluation in 2022, which included the completion of audits, the development of energy-saving measures and a subsequent feasibility study.

This multi-phased project is currently in the design stage, which is anticipated to extend through the remainder of the year and into early 2025.

To initiate project implementation, fast-tracked measures will involve the simultaneous replacement of 10 boilers across 5 buildings and initiating LED lighting upgrades in 110 buildings this summer.

With multiple initiatives underway, the project’s full completion is expected by the end of 2026.

“CFB Edmonton houses some of the most prestigious and experienced units in the Canadian armed forces,” said Bob McCullough, president of Ameresco Canada.

“The enhancements to the lighting, heating, cooling and water systems will provide troops with a more modern, comfortable and efficient energy system while greatly benefiting the surrounding community through their lowering of carbon emissions.”

According to Market Reports World, the global Home Energy Management Systems Market is expected to witness substantial growth from 2022 to 2028, reaching $3.5 billion by the end of the forecast period, up from $1.7 billion in 2021.

Fuelled by the increasing importance of intelligently managed energy efficiency for our power systems, the forecast for its growth is no surprise.

The potential of under-utilised sources of demand response within the residential sector has been a growing business interest as countries investigate newer, smarter ways of managing grid congestion.

What this has led to is a business battleground and, until recently, a largely fragmented market.

In one corner stand the original equipment manufacturers (OEMs) of clean tech assets, such as Heating, Ventilation and Air Conditioning (HVAC) systems, EVs and their charge points, as well as heat pumps and solar PV panels, to name some of the most popular.

In another are the optimisers and integrators, those companies who coordinate the flows of energy for optimal consumption, at times running interface with grid operators for demand response and flexibility services.

Then finally, we have the energy retailers, who buy electric power from generators at the wholesale level on behalf of their customers.

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For all these players, key to gaining market share will be convincing their customers that their products or services within the space are the most seamless.

For some, take market leaders such as Tesla or Octopus Energy, doing so largely on their own terms has been a very viable course of action.

But for others, whether HVAC providers, smart thermostat manufacturers or PV specialists and energy optimisers, more strategic footwork has been necessary, calling for acquisitions and strategic partnerships to consolidate their positions.

“The real war is about who will take ownership of being the ones that will convince the end customer to use their assets or their services.” So stated George Husni, LCP Delta’s head of business development.

Industry edge

According to Husni, in the battle between smart thermostat manufacturers and HVAC players, the former innovated user interfaces earlier giving them an edge, whereas “HVAC players lagged behind in developing the mobile application for end customers.

“We believe that within five years’ time integrated PV specialists, like 1KOMMA5°, as well as energy suppliers are expected to gain market share by offering a suit of solar-related offerings and innovative business models; smaller installers will be acquired and will phase out of distribution because they will not own the relationship with the final customers.”

Husni referenced key partnerships, acquisitions and strategic moves from the last quarter. Including a consolidation by emobility giant and Texas-based OEM Tesla, who has long dominated the EV realm, in 2023 they integrated the Powerwall system with their EV solar charging infrastructure.

In essence, Tesla owners using Tesla software, namely the Charge on Solar programme, can charge their vehicle using only excess solar power generated by their panels, alleviating stress from the grid of charging the EV and leading to a more energy-efficient home.

Tesla can thus be said to be a go-to case of an OEM leading the market on their own terms, consolidating their business across the Home Energy Management segment while maintaining their position as the EV leader.

Dominance in the realm also brings to mind the case of Octopus Energy, an energy supplier which, under its own retail brand, delivers customer service and energy products to 7.7 million households globally. Add in the influence of Kraken Technologies, Octopus’ tech arm and customer platform, and it is no wonder that the British player has been at the forefront of news headline the past few years.

According to Husni, there is a certain level of ‘concern’ about retailers in the market, about if and when they would decide to properly engage, as they already have an advantage from data and relationships from their customer base; a point made more pertinent by Octopus Energy’s stature.

But, of course, not everyone can be a Tesla or an Octopus.

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Home Energy Management: Consolidatory moves

Husni stressed key moves that have been needed by PV specialists in Europe, such as 1KOMMA5°’s acquisition of solar installers Zonduurzaam to enter the dutch market and experta solar to consolidate in Spain, as well as SolarEdge’s partnership with European heating manufacturer Vaillant to integrate Vaillant heat pumps into the SolarEdge Home ecosystem.

Further cases include the GridX and Sense partnership, focused on leveraging smart meters to provide consumers and utilities with better insights into energy usage and costs, as well as Sonnen integrating Nibe heat pumps into their virtual power plant programme.

On the energy supplier side, states Husni, Heatio partnered with E.on to provide its Energy as a Service solution through a home subscription product. The solution will integrate E.ON Next energy tariff and incentivises homeowners to improve the energy efficiency of their homes.

Take also Samsung’s smart home platform SmartThings, which partnered with energy related companies, such as Eve Systems in 2023 and British Gas earlier this year in January, to integrate products and track consumption.

In the partnership with Eve, SmartThings users will have the ability to reduce power consumption by monitoring individual devices that are connected to Eve’s smart plug, reducing utility bills by creating automation routines and setting timers to optimise energy usage.

The partnership with British Gas, described by British Gas’ parent company Centrica as “the exciting first step in a long-term venture”, sees British Gas’ PeakSave demand flexibility scheme integrate with SmartThings Energy, informing customers on the best times to use appliances to save money.

An energy integrator here, Samsung’s moves further cement its position in the market as an energy flow coordinator, interfacing both with energy companies and utilities to oversee consumption.

Such cases demonstrate the moves market players make to cement their position in the home energy management as it continues to consolidate. What are some of the key acquisitions and strategies you’ve witnessed within and think should be on our radar?

Let us know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on Linkedin

The integrated EV charging solution, which allows for dynamic and intelligent on-site charging management, was customised by Siemens engineering and software teams in Portugal.

According to Siemens Smart Infrastructure, the dashboards present comprehensive information to the building manager or operator who can instantly view all information about each charger, as well as monitor energy consumption in real time.

Precise reports per apartment based on monthly consumption are produced, states Siemens, facilitating optimised and energy performance.

José Cardoso Botelho, CEO of Vanguard Properties, which owns the Infinity building, said in a release: “Real estate activity has a considerable impact both environmentally and socially on the community. Infinity is a project of immense pride to us, and an important reference of our digital transformation. We are glad to have collaborated with Siemens to create a sustainable building for tomorrow.”

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The Infinity building is a luxury condominium by Vanguard Properties located in Sete Rios, Campolide, Lisbon, Portugal.

It is one of the largest residential projects in the city, with 26 floors above ground, 195 apartments and 352 parking spaces, covering more than 50,000 square meters of floor area. It is set to be the tallest residential spot in Lisbon’s city centre.

VersiCharge wallboxes are distributed over six charging islands, across three floors of the building. The energy management system is also prepared for the future integration of PV or other renewable energy generation, as well as energy storage systems which will contribute further to energy efficiency and the reduction of the building’s greenhouse gas emissions.

The system includes the latest cybersecurity functionalities, and it supports global efforts to achieve climate targets by enabling the expansion of renewable energies.

Markus Mildner CEO eMobility, Siemens Smart Infrastructure added: “Managing EV charging infrastructure via intelligent load management is crucial for sustainable energy systems and grid stability”.

The contract includes delivery of the scalable SICAM Dynamic Load Management (DLM), based on the SICAM A8000 power automation platform.

The SICAM A8000 series is a modular device range for telecontrol and power grid automation applications in all areas of energy supply.

SICAM DLM is a charging station management system prepared to receive grid constraint signals from DSOs and to integrate local DER and energy storage systems, facilitating communication with chargers, from which it extracts information related to consumption and offers dynamic charging management algorithms.

At the request of the US Department of Energy (DoE), the Board held a kick-off meeting on February 7, 2024, for the contract’s development.

According to the Board in a release, the lack of such a standard contract marks a significant market barrier inhibiting the provision of distribution services from DER aggregations. Said contract would specify discrete services and related performance expectations from aggregators.

Michael Desselle, NAESB’s chairman, stated: “We appreciate the US DoE’s recognition of the impact NAESB model agreements have had in improving transactional efficiencies within wholesale markets and for competitive retail energy services.

“There is a growing need for standards to support integration and interoperability of DERs and DER aggregations, and the framework established by a NAESB model distribution services contract may lead to future standards development that can improve data sharing practices and enhance cybersecurity.”

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Currently, contracting practices can widely vary between jurisdictions and even utilities within the same state.

The NAESB standard distribution services contract would aim to incorporate terms and conditions, developed through a consensus-based process, that align with key aspects of state policies while providing flexibility for regulators and trading partners to adapt to unique circumstances.

The intent, states the Board, would be to create an agreement with broad applicability that will support consistency in contracting terms and definitions, minimise uncertainties in the contracting process and reduce costs associated with counterparty negotiations.

Per the request, this will encourage market and operational coordination across distribution and wholesale interactions, enabling more seamless participation for DER aggregators seeking to participate in wholesale markets.

According to the US DoE Pathway to Commercial Liftoff: Virtual Power Plants, cited by NAESB, the use of VPPs comprised of DER aggregations could result in upwards of $10 billion in annual savings of grid costs.

In recognition of the crucial role VPPs may play in the energy landscape, the US DoE issued an urgent call to action to accelerate commercial viability, noting that the expansion of VPPs relies on increased penetration of DER aggregations.

The system, a first for Romania, involves the development of a set of AI-based algorithms that draw on data from sensors throughout the building to develop energy consumption patterns.

With the project driven by sustainability concerns, Electrica reports, ultimately the aim is to identify effective solutions that can support this.

Alexandru Chiriță, CEO of Electrica, commenting that the project acronym AI-AE sounds like an exclamation of success, said that energy is among the fields that are gaining enormously from AI-interpreted data.

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“We strongly believe that those companies that rely on innovation and effective data collection and interpretation systems will succeed to offer the best products and services. The system we are applying for the first time in our headquarters is another proof of the fact that we respect our commitments and want to be at the forefront of technological developments.”

Electrica is developing the project in partnership with researchers from the Technical University of Cluj-Napoca and the technology startup Renergia.

In addition to the algorithms, the project involves the creation of a cloud-based infrastructure to collect and store the data and a dashboard tool for easy access to the data.

Electrica also is proposing the creation of a strategy to replicate the solution for the entire heritage of buildings in Romania.

The Technical University of Cluj-Napoca has implemented a building automation laboratory in partnership with the KNX association.

Renergia, which is affiliated with the University, has developed the first mobile sustainable app in Romania that generates a personalised home energy balance sheet and energy efficiency measures for users.

Also on the radar are virtual power plant (VPP) provider Swell Energy’s acquisition of Renu Energy in Carolina, US, and Second Foundation’s acquisition of a Nano Energies brand in the Czech Republic.

Siemens Energy’s strong Q1

Revenue came in at €7.6 billion ($8.2 billion) reflecting a 12.6% increase, four months after the energy major reported a $5 billion loss and safety net from the German federal government.

In a release, the company said that, while all segments contributed to growth, the increase was particularly strong at Grid Technologies.

Exceptionally high orders exceeded an already outstanding level in prior year’s quarter, mainly driven by Grid Technologies’ product business and high-voltage direct current transmission system orders in Germany.

The company is further planning to achieve comparable revenue growth of 18% to 22% within the grid portfolio.

“The solid first quarter is encouraging, in part also due to project shifts, which are normal in plant engineering, especially with the market dynamics we are currently seeing,” said Siemens Energy CEO Christian Bruch in a release.

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Swell Energy acquires Renu Energy Solutions

Swell Energy Inc., an energy management and grid solutions provider, has acquired Renu Energy Solutions, a Carolinas-based company that offers customised residential and commercial solar and energy storage solutions.

The combination brings together a complementary set of operational and technological capabilities as well as a bi-coastal presence to enable the deployment of VPPs in key energy markets.

With the combination of Renu’s seasoned project development capabilities and Swell’s financing and VPP technology platform, the combined company says it is now well positioned to expand its footprint across the Southeast and mid-Atlantic market, and contribute to the strong growth in residential and commercial solar and storage capacity in the region.

Since 2010, Renu has offered residential and commercial energy solutions with an emphasis on installations and energy monitoring services. The acquisition includes Renu’s solar and storage maintenance subsidiary, Sun Service Specialists, which serves both Renu and non-Renu customers with thousands of distributed energy resources (DERs) across the East Coast.

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With Renu serving as a regional hub, Swell’s channel partner programme provides other residential and commercial solar companies access to customer acquisition resources, fluid supply chain, critical software tools, financial products, grid services offerings and the opportunity to become VPP co-developers alongside Swell.

“With rapidly growing energy demand, favourable policies, and high solar potential, the Southeast is quickly becoming one the most attractive markets in the country for solar and energy storage systems,” said Jay Radcliffe, President of Renu.

“Swell’s robust technology portfolio combined with Renu’s full-service in-house team and unique expertise will drive innovation and ensure clean energy solutions are not only accessible but also efficient, reliable and tailored to the individual needs of our customers.”

Second Foundation acquires DES Holding

Czech-based technology group Second Foundation has signed an agreement on the acquisition of DES Holding, a flexibility aggregator and member of the Nano Energies group.

The agreement was signed on behalf of Nano Energies by its owner Petr Zahradník. The transaction marks the next step in Second Foundation’s strategy to gradually shift from focusing purely on financial algorithmic trading towards reaping the benefits of energy flexibility and smart management in renewable and other sources of energy.

Under the new owner, DES Holding will continue to use the Nano Energies brand with which its customers and partners are familiar.

The transaction does not involve the Nano Green division, an energy supplier active in managing power generation and consumption in smart households. Rather, Nano Green will be acquired by current managers David Brožík, Jan Hicl and Lukáš Beneš, the owners of the S9Y software studio.

The three managers have been at the helm of Nano Green for the past year and a half and will acquire Petr Zahradník’s shareholding to become the sole owners of Nano Green.

“In early 2024, we plan to launch a new service for our customers. It will enable fully automatic management of electricity generation and consumption. By offering the service, we will open the door for owners of smart homes and small businesses to participate in balancing the grid. In other words, they will be able to earn money by shifting their power production and consumption across time segments,” said Jan Hicl, chief product officer at Nano Green, in a release, unveiling the company’s plans.

The acquisition by Second Foundation is already the second such transaction involving subsidiaries of the Nano Energies group. Second Foundation acquired Nano Energies Trade in early 2022.

The transaction is still to be approved by the Czech Office for the Protection of Competition (ÚOHS). It is expected that the transaction will be closed in the first quarter of 2024.

For the latest finance and investment news coming from the energy sector, make sure to follow Smart Energy Finances Weekly.

I will also be attending Distributech International in Orlando Florida later this month. Will I see you there?

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

Follow me on LinkedIn

To fully utilise all the potential that VPPs can offer in the next few years, we’ll need a major strategy overhaul. While COP28 agreements to transition away from harmful fossil fuels and triple our collective renewable energy production by 2030 are noble, it will take intentional and strategic goalposts to help us get there.

To reach the targets set forth at COP28, we must accelerate global energy capacity and make progress as soon as this year in order to more than double our renewable capacity by the end of this decade. But here’s the good news: VPPs are one of the most effective—and as yet, largely untapped—tools that we can use on this journey.

In 2024, progress for VPPs will mean stakeholders taking initial steps towards promoting VPP adoption by both Programme teams and Energy Procurement teams, fostering customer engagement, developing supportive policies and regulations, and leaning into open standards.

Down the line, I see an increased adoption of devices and smarter homes, leading to a smarter grid, smarter cities, and ultimately smarter communities.

Making 2024 count – First steps

Climate conversations are now mainstream. With this increased attention to the energy transition, regulators and lawmakers will continue to push utilities to take faster action.

Announcements like Michigan’s targeting of 100% clean energy by 2040, while critical, are just part of what is needed for true progress.

We need each utility and load-serving entity to participate more fully in the energy transformation. This will require engaged, progressive utilities to see the potential behind flexible energy technologies like VPPs that bring reliability, cost savings, and increased integration of renewable distributed energy sources.

This shift can promote a solid foundation for meaningful participation in the evolution of the energy landscape more broadly. 

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Incentivising community engagement 

Propelling utilities to increase VPP adoption also requires bringing customers along on the journey. Promoting this engagement requires education, so we need to focus on helping individuals understand the direct impact of their actions.

Regulatory bodies like rate makers are working to communicate these differences effectively. Major players such as original equipment manufacturers (OEMs) are also engaging with users in a meaningful and contextualised way, contributing to the development of an ongoing educational journey. Especially noteworthy is the shift towards more personalised incentives that resonate with customers. These incentives are designed to speak the customer’s language and address concerns that are genuinely meaningful to them.

Importantly, customers receive immediate value through their participation in VPP programmes. Benefits are both fiscal and societal, as participating customers can gain financial incentives through VPP solutions by sharing assets with the grid or reducing their usage. This not only provides communities with financial benefits but also aids utilities in effectively handling our growing electrical demands. 

As VPPs are more widely adopted, the frequency and duration of their dispatch will increase with only minor added costs for operators and utilities.

The grid is constantly balancing many things, be it frequency capacity, energy demands, or emergency events. Those value streams create a direct benefit to utilities by better balancing their cash flow and providing ratepayers with greater returns. This is also the best cost option for utilities since the cost of incentives is lower than non-VPP alternatives to meet energy strain.

The equation is simple: To meet demand, utilities can either build and turn on more peaker plants, or they can pour those same dollars through VPPs into the hands of communities and customers.

Open standards are not optional

Beyond customer engagement, the industry also needs standardisation of protocols. This involves creating streamlined communication threads, allowing devices to seamlessly interact with each other and connect with grids through a software middle layer.

Simplifying these interactions reduces friction in our infrastructure, leading to accelerated device adoption, improved affordability and streamlined execution of programmes like virtual power plants.

This approach will also lead to the enhancement of products and services in the energy sector. Although work is already underway on these protocols, their widespread implementation is vital for enhancing the overall efficiency of the industry’s energy transition.

Interoperability and open standards are essential for multi-asset, multi-vendor VPPs—and are critical for scaling VPP adoption. While lack of standardisation presents challenges, companies are navigating these obstacles.

Despite hurdles, companies like AutoGrid work to promote VPP adoption, accelerate the energy transition, and improve widespread access to sustainable energy. I see even more consolidation happening in this space, leading more technologies and players to simplify steps for users.

For example, Uplight’s recent acquisition of AutoGrid will help expand the existing ecosystem of participating devices, along with other benefits.

Net zero within reach

As I think about how we’ll reach 2030 net zero goals, embracing VPPs is essential. From my experience spanning the energy sector, I know it may be hard, but we can do hard things.

It will just take the right partners, incentive structures, engaged customers and cutting-edge technologies. With these goalposts as our blueprint, we can work to unlock the full potential of VPPs for 2024 and beyond. It’s only then that we can take those lofty goals set forth during COP28 and make them achievable.

About the Author

As Autogrid’s VP of VPPs, Gisela Glandt leads AutoGrid’s Virtual Power Plants business and oversees the growth and health of Autogrid’s Distributed Energy Partner ecosystem. Prior to AutoGrid, Gisela led Nest’s Smart Home and Energy Partnerships at Google, with a focus on formulating and executing growth strategies for cutting-edge products and cultivating strategic partnerships.

The trial, named the Boston Spa Energy Efficiency Trial (BEET) after its location in the village of Boston Spa and surrounding areas including the town of Wetherby, involves the use of the so-called ‘BEET-Box’ to turn the voltage up or down, based on smart meter data, to the level that appliances need to work most efficiently.

The BEET-Box, developed with input from voltage control specialist Fundamentals, GE Digital, Siemens and the University of Sheffield, applies an algorithm to the smart meter data on a near real-time basis on which the voltage can be optimised, with reductions leading to energy savings and in turn bill savings.

Northern Powergrid has estimated that trial participants should save an average £28 ($35) on their annual energy bills along with a carbon footprint reduction of 20kg per year.

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“BEET is a fantastic example of how we’re innovating today to deliver future benefits for our customers,” comments Mark Callum, Smart Grid Development Manager at Northern Powergrid.

“We are trialling technology that can help us increase the efficiency of our network for our customers, whilst reducing their carbon footprint and overall energy consumption. It could also bring us one step closer to decarbonising the region, by enabling the introduction of more low carbon technologies, like electric vehicles and solar panels, onto the grid.”

With network operators typically running their system within the top end of the voltage range to ensure it does not drop below the lower limit if demand surges, the concept of voltage optimisation, or conservation voltage reduction, is not new.

But its implementation with smart meter data appears to be and Northern Powergrid’s investigation was the suggestion of local resident Keith Jackson, a retired engineer from the electricity industry, who has said the possible solution came to him after having suffered excess voltage at his home and his subsequent finding that the network regulations do not incentivise such voltage trimming.

With the concept particularly beneficial for vulnerable customers, Northern Powergrid is prioritising the rollout of the solution to areas with increased levels of fuel poverty.

If the trial is successful, then it could be rolled out across the majority of its network spanning northeast England, Yorkshire and northern Lincolnshire by 2033.

Findings also will be shared with other network operators, with a national scale-up estimated to have the potential to deliver annual carbon savings of 1.1Mt and consumer bill cuts of up to £770 million.

The DNO has added electric utility company Equiwatt to its portfolio of flexibility service providers, making use of their virtual power plant and smart ‘powerDOWN’ programme, which rewards households for using less energy at peak times, with Equiwatt acting as an energy aggregator.

Northern Powergrid is responsible for the distribution network covering 8 million customers.

The initiative allows households and businesses across the North East, Yorkshire and northern Lincolnshire to earn revenue by reducing their power usage at peak times, supporting the region’s transition to net zero.

During powerDOWN events, customers can earn points, which can then be redeemed for rewards such as eGift cards via an app gift store.

Customers will be rewarded by taking part in such events every day between 4.30pm and 7pm, with a potential to earn £35 ($44.17) worth of points during the trial period.

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Maurice Lynch, head of System Flexibility, Northern Powergrid, said in a release: “The start of a new year brings exciting opportunities for our customers to help shape and be part of our drive towards a smarter and more flexible net zero energy system.

“We’re proud to announce our flexibility service partnership with Equiwatt which will see customers being rewarded for reducing demand on the network during peak times. This will help us to manage the network in a smarter and more efficient way that maximises cost efficiency for our customers.”

Added Johnson Fernandes, founder and CEO at Equiwatt: “We’re delighted to partner with Northern Powergrid and help empower its 8 million customers to save energy when it matters most.

“Our powerDOWN scheme is accessed via a free and easy-to-use app and invites customers to register for peak-time notifications. Households can then reduce their energy usage during powerDOWN events and earn points (…) Put simply, our smart technology enables customers to tailor their energy usage and helps reduce their carbon footprint.”

With the 100,000 participants having been enrolled over six months, the VPP is now capable of delivering peak demand reduction of up to 90MW, the equivalent of taking a city the size of Kingston, Ontario off the grid during peak times.

During summer 2023, the Peak Perks virtual power plant was activated on six occasions in Canada, with the final event in early September achieving a maximum one-hour peak demand reduction of 54MW.

Flexible capacity is expected to climb as enrolment continues.

Participants in Peak Perks help the grid with their smart thermostats by participating in brief, time-limited thermostat adjustments of up to two degrees Celsius during periods of peak electricity demand between June 1 and September 30 on weekday afternoons or in early evenings.

Participants receive a $75 virtual prepaid MasterCard when they enrol, as well as a $20 virtual prepaid MasterCard each additional year they stay in the programme.

Residential electricity customers in Ontario with central air conditioning or a heat pump controlled by a smart thermostat are eligible to take part.

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“We are so pleased that Ontario residents are taking an active role in energy efficiency through Peak Perks,” said Tam Wagner, director of Demand Side Management at the IESO.

“Demand side management is a critical resource that can make a significant contribution to the reliability of the province’s electricity grid – especially on hot summer days when air conditioning use is at its highest – and will play an important role in ensuring long-term electricity supply matches demand in the province.”

Citing a 2023 research report from Rocky Mountain Institute (RMI), Virtual Power Plants, Real Benefits, EnergyHub states how virtual power plants are a valuable and largely overlooked resource for advancing key grid objectives.

According to a report from RMI, which early last year founded a virtual power plant partnership known as the VP3, by 2030, VPPs could reduce peak demand in the United States by 60 gigawatts (GW). That number could grow to more than 200 GW by 2050.

“The scale and speed of enrolment proves that electricity providers and customers can partner on initiatives that provide mutual benefit,” said Erika Diamond, senior vice president of Customer Solutions at EnergyHub.

“The IESO has built a resource that will continue to grow and play a key role in keeping the grid reliable and accelerating decarbonisation as demand for electricity in the province increases.”

EnergyHub adds that close coordination with OEMs, optimised customer-facing microsites and enrolment pages, as well as consultation on marketing best practices – paired with integrations with the industry’s largest network of device partners – enabled tens of thousands of the IESO’s participants to the programme with the smart thermostat of their choosing.

Digitalisation is very much front and centre in the energy sector currently and it is too in other sectors as they look to harness the benefits.

While key enablers of digitalisation, such as data centres and artificial intelligence are of concern as their number and the level of activities grow, a new study from Capgemini’s research institute indicates that the implementation of the digital technologies themselves can yield savings.

According to the study, through their implementation organisations have reduced their energy consumption by almost a quarter over the past five years, while also a 21% decrease in greenhouse gas (GHG) emissions has been delivered.

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Moreover, further reductions are in prospect, even as digital footprints expand.

The use of technologies to reduce the carbon footprint, coupled with advances in energy efficiency within the digital landscape, suggest that the benefits are expected to outweigh the environmental costs, affirming the significant positive impact of digital technologies, the report states.

The eco-digital era

The report projects that the eco-digital economy – i.e., that delivers economic value and environmental and social value – will grow at a rate of 15% annually to double in size over the next five years.

Digital platforms and software drive this, 5G comms and emerging technologies such as generative AI, digital twins and quantum computing, with outcomes expected to boost innovation, productivity and decision-making and drive the emergence of new revenue streams.

Based on the five-year emissions reductions of the organisations, growth scenario modelling by Capgemini Research Institute indicates that over the next five years, digital technologies could deliver a net emission reduction of between 8-12%, significantly outweighing their associated 2% footprint.

For example, tools such as augmented and virtual reality reduce the need for travel.

Energy consumption can be optimised with digital solutions and they can be used to aid informed decision-making to mitigate environmental impact.

A case cited is LG Electronics in Changwon, South Korea. It achieved a 17% productivity boost, 70% higher product quality and a 30% energy consumption reduction by converting its assembly-line simulation into a digital twin integrated with real-time data.

Another is Schneider Electric, which at its Le Vaudreuil site has implemented IIoT sensors and real-time digital twins of plant installations, resulting in a 25% reduction in energy consumption and a 25% reduction in emissions as well as a 17% decrease in material waste.

Additionally, a zero-reject water-recycling station connected to cloud analytics and monitored by an AI model at the company’s smart factory has led to a 64% reduction in water usage.

The research also indicates that organisations have only scratched the surface of the current technological landscape, harnessing around 25% of the overarching potential of mainstream digitalisation technologies such as AI/ML, robotics, automation and the Internet of Things.

This indicates immense untapped possibilities in digital innovation – and with digital investment as a proportion of revenue expected to double in the next five years, these will undoubtedly result.

For reference, the top investment priorities are scaling mainstream technologies such as data and the cloud, cybersecurity and privacy measures and reskilling of the existing workforce.

Capgemini’s research institute also provides some recommendations on how to harness the opportunities of the eco-digital era.

These include identifying efficiencies across the business to drive cost savings, striving for a balanced blend of short-to-medium-term successes and reinvesting savings into digital transformation.

Sustainability and accessible performance metrics also should be embedded into the product and services lifecycle.

The study was based on a survey of 1,500 senior executives at large global organisations and high-value start-ups, and so it is not energy sector-specific. Nevertheless, it highlights not only the internal benefits your company can achieve but also the external with a further recommendation to tap into the industry and supplier ecosystem, i.e. of you the reader, to accelerate improvements.

Jonathan Spencer Jones

Specialist writer
Smart Energy International

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“This comes from the IEA’s net zero emissions roadmap as a key milestone for early action, not only because of the direct emissions abatement but also because of energy efficiency as an enabler of other activities such as reducing energy demand growth,” said Brian Motherway, Head of Energy Efficiency and Inclusive Transitions at the IEA, opening a webinar on the topic.

Commenting on the recognition of energy efficiency in discussions at COP28, he said the IEA was delighted with this outcome.

“We know the policies that are required and the technologies that are essential and now it’s an action agenda.”

Doubling global progress

Expanding on the goal of doubling energy efficiency, Jack Miller, an energy policy analyst at the IEA, explained that the measurement of energy efficiency is via the metric of global primary energy intensity, i.e. the ratio of energy use to global GDP.

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With the general downward trend, changes are defined as the year on year percentage decrease, which in 2022 was 2%, i.e. that each unit of energy used produced 2% more GDP than in 2021.

“This sets the baseline of the doubling goal and so by the end of the decade we need to reach just over 4% per year,” he stated.

With that energy efficiency would deliver almost half of the emissions savings needed by 2030, up to one-third in savings on energy bills in many countries and 4.5 million more jobs for people to design, manufacture and install the needed technologies.

And he adds that while it is a necessary goal, it also is feasible, the IEA believes, based on tracking of countries’ progress over the past 10 years, with most having reached the 4% threshold at least once and half at least three times – and 40 countries achieving it in 2022 or 2023.

“The challenge is now to achieve that consistently for the rest of this decade … so it’s clear that every government must take strong and immediate action to accelerate energy efficiency to reach the doubling goal.”

Miller stated that there are three key actions, as set out in the IEA’s NZE scenario, that will contribute to the doubling goal, and in roughly equal proportions.

These are switching to more efficient fuels, including electrification and clean cooking, improving the technical efficiency of products and buildings and avoiding demand through behaviour change.

“The technologies [lighting, HVAC, vehicles, etc.] exist and the policy foundations are in place so it is about going further and becoming more ambitious.”

Policy support

For its part the IEA has produced an energy efficiency ‘policy toolkit’ with a set of strategic principles and policy packages to support governments.

The organisation also can provide support for ‘cross cutting’ issues such as demand response, flexibility and behavioural insight, which are integral to the complementary target increase of a tripling of the global renewable energy capacity by 2030.

Miller also noted that the next major discussion around energy efficiency at governmental level can be expected at the IEA’s next global conference on the topic in Nairobi, Kenya in May 2024.

In two separate and unrelated initiatives united only by the word ‘waste’, Veolia has pioneered V2G in a trial with its waste collection trucks, while Octopus Energy is investing £200 million ($255 million) in the startup Deep Green to scale its technology to capture waste heat from data centres and provide free heat to energy-intensive organisations such as leisure centres.

In the first phase of Veolia’s trial, the company has demonstrated charging and discharging of 110kW of energy from two specially designed bi-directional vehicles – enough to supply power to 110 households for over two hours during peak evening hours.

Veolia now plans to expand the trial and test it out on the streets, using Westminster council collection vehicles to pilot the innovation.

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In due course and by 2040 Veolia plans to electrify all of its 1,800 refuse collection vehicles, with the potential to provide around 200MW of flexible power to the grid daily.

Such vehicles are considered ideal for V2G with batteries that are six times larger than those in an average car and that the fleet is usually parked at peak energy consumption times for the national grid.

Veolia also intends to maximize the use of local decarbonised energy from its waste-to-energy plants to power its vehicles.

“We need to innovate in local decarbonising energy and transform our traditional approaches to take advantage of untapped sources,” commented Veolia CEO, Estelle Brachlianoff.

“This requires a change of mindset and a collective willingness to rethink the way we produce, distribute and consume energy. The success of the V2G demonstration illustrates this perfectly.”

Waste heat for heating

Octopus Energy’s investment in London-based data centre company Deep Green is aimed to help it rapidly scale its micro data centre technology at ‘edge’ sites across the UK.

The Deep Green furnaces are comprised of computers immersed in a biodegradable mineral oil to capture the heat generated, which are installed on-site and the heat delivered to the adjacent swimming pool or other user of large volumes of heated water such as a distillery or large apartment block.

In return, Deep Green gets free cooling to give it the competitive advantage over traditional data centres and to offer more affordable, energy-efficient computing to businesses.

With their micro-scale and on-site installation, the data centres do not require additional grid upgrades or planning permission so can be up and running in a matter of weeks.

Zoisa North-Bond, CEO of Octopus Energy Generation says innovative solutions to unusual problems are needed to tackle the energy crisis head-on.

“By using excess heat from data centres to slash energy bills for communities across the UK, Deep Green solves two problems with one solution. We’re looking forward to rapidly rolling this out and positively impacting even more people as we drive towards a cleaner, cheaper energy future.”

In a press notice, the company quotes a swimming pool in Devon as slashing its pool heating bill by over 60% and cites current customers including York University.

Octopus Energy launched its Transition fund in 2023 to support scaling companies in fast-growing sectors decarbonising society. A previous recipient is the ground-source heat pump company Kensa Group.

“With energy accounting for 80% of carbon emissions, the energy transition is central to decarbonisation,” said Peter Herweck.

“The potential of AI is currently capturing everyone’s attention. But let’s not forget that existing technologies – both renewable energy generation and digital and electrification tools that lower energy demand by rendering sites and operations far more energy efficient – can sharply reduce emissions now. There’s no time to wait for tomorrow’s solutions when much more can be achieved with what we have today.”

The statement was issued as several of the company’s senior executives started arriving at the World Economic Forum’s annual meeting in Davos, Switzerland.

Accelerating climate change, geopolitical tensions, see-sawing energy prices, and pressure from stakeholders to address these risks have pushed environmental sustainability and energy resilience to the top of the corporate and policy agenda in recent years.

It’s these circumstances, according to Herweck, that should cause the sector to urgently look to the technology we have at our disposal now for solutions.

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Action from the private sector – by companies around the globe – is key to lowering emissions. Encouragingly, the business world is increasingly making commitments to sustainability and decarbonisation.

As of January 2024, more than 4,200 companies worldwide have set emissions-reduction targets validated by the Science Based Targets initiative (SBTi), for example.

The power of energy efficiency, in particular, is gaining more recognition. Last year, Schneider Electric partnered with the International Energy Agency to bring together government and business leaders for a major conference on the topic.

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A new report published by the World Economic Forum on January 8, found that acting on energy consumption through energy savings, energy efficiency and value cooperation partnerships could unlock up to $2 trillion in savings for the wider economy, and avoid building 3,000 additional power stations if actions are taken before 2030.

In addition, research conducted by Schneider Electric recently showed that installing digital building and power management solutions in existing buildings could sharply reduce their operational carbon emissions, with a payback period of less than three years – highlighting the huge potential in that area alone.

Challenges and opportunities in tackling Scope 3 emissions

Another key area of focus is tackling the indirect emissions generated by companies’ “Scope 3” emissions activities. These come from their upstream and downstream value chains and account for the largest part of a company’s carbon emissions – more than 70%, according to the UN Global Compact.

The global supply chain disruptions of the past few years have helped push this topic up the corporate agenda. More than two-thirds of business leaders interviewed for a report last year by Schneider Electric, in partnership with Women Action Sustainability (WAS), said that regulatory pressure was pushing them to initiate decarbonisation planning with supply chain partners.

Those surveyed also said they were seeing an increased demand for supply chain decarbonisation information from investors and/or financial entities.

Olivier Blum, executive vice president of Energy Management at Schneider Electric, said: Businesses that are serious about decarbonisation need to look beyond their own operations and address their entire value chain. And they need to realise that encouraging and helping their suppliers, customers, and other business partners to strive for greater energy efficiency – through electrification and digital technologies – and cleaner energy procurement, is a huge part of the answer.”

NXP Semiconductors’ neural network-enabled, industrial-grade applications processors will be integrated into Honeywell’s building management systems (BMS) to make buildings operate more intelligently.

The MOU will initially focus on the Honeywell Optimizer Suite control and automation platform.

Furthermore, the partners aim to deliver smart energy solutions powered by AI/machine learning and data analytics to enhance building autonomy and energy efficiency, while guiding service technicians.

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“Buildings are increasingly relying on data and the ability to control operations via automation to make them more sustainable while operating more efficiently,” said Suresh Venkatarayalu, Honeywell’s chief technology officer. “NXP’s latest machine learning solutions will help us deliver excellence in building automation for our customers.”

Honeywell will build on NXP’s scalable semiconductor and software solutions, such as the i.MX 8M applications processors and i.MX RT crossover microcontrollers, to help securely observe, learn and adapt in real time, enhancing analytics and decision-making in the same on-site BMS equipment that manages critical building systems.

Augmented by cloud-based big data analytics through the Honeywell Forge analytics solutions, buildings can increasingly leverage better foresight and insight for energy usage optimization to enable improved sustainability outcomes.

According to the International Energy Agency (IEA), buildings’ operations contribute 30% of global final energy consumption and 26% of global energy-related emissions, making it all the more important to enhance buildings’ autonomy and energy efficiency.

According to Spain’s TSO Red Eléctrica, the figure represents an increase of nearly 23% compared to the first auction, which came into force in 2022.

The demand response service is an energy-balancing mechanism within current regulations to guarantee the necessary balance between generation and demand. It can be applied in specific situations in which the system operator determines that there are not sufficient resources to maintain adequate reserves for the system.

The service is available to consumers and retailers with a demand of at least 1MW and, therefore, does not apply to domestic consumers or small companies. In this second auction, a total of 19 participants submitted their bids through the system operator’s online information system.

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Successful bidders will be remunerated with €40.82 ($44.09) per megawatt and per hour allocated in exchange for their availability to reduce their consumption in time periods established for the provision of the service.

On the other hand, the activation of the service will be remunerated at the then-current tertiary control price for the hour the service is requested.

Per the mechanism, the bidders awarded the service agree to reduce their demand, after being requested to do so with at least a 15-minute notice, for a maximum period of 3 hours per day.

The applicable period established for the activation of the service, in line with the auction terms and conditions, runs from 1 January to 31 December 2024.

Red Eléctrica in a release cites the potential of demand-side ancillary services in system operation to provide the system operator enhanced flexibility in system operations while promoting decarbonisation.

Countries such as France, Portugal and the United Kingdom also have different specific mechanisms for demand-side services that enable said countries to take advantage of such demand-side resources to help cover the flexibility needs that the electricity system operator may require.

From the progress global organisations are making on their digitalisation journeys to guidance on how to adopt circularity to reduce the total cost of ownership and improve sustainability by extending the lifetime of power distribution assets, ABB’s reports explore the key challenges facing the sector and outline potential solutions.

Stuart Thompson, President of ABB Electrification Service said: “The global geopolitical landscape has failed to stabilise in 2023, with continuing volatility impacting financial markets, supply chains and energy security. At the same time, the UN is calling for urgent action to accelerate the climate transition before it’s too late.

“In response, businesses need to focus on reducing capex, improving operational productivity and maximising the assets they already have. In 2024, we expect this to result in an increased adoption of connected digital technologies, retrofitting and circularity. When done right, this can lead not only to cost and energy efficiencies, but also set business on an accelerated path to decarbonisation.”

Where are global industrial businesses on their digitalisation journeys?

The first report, ABB’s digitalisation white paper, See the potential of digital faster, provides an overview of where industrial organisations are in their digitalisation journey and how they can scale the adoption of Industrial Internet of Things (IIoT) technology.

Based on research of more than 300 industrial decision makers across seven markets and nine industries, including utilities, data centres, renewable energy and transport infrastructure, 93% of organisations have started implementing IIoT technologies such as sensors and monitoring software to cut costs and improve operational and energy efficiency.

However, while many organisations have embarked on their digitalisation journey, the report revealed that the majority are still in the early stages. While 78% say IIoT is delivering business value, 7% have not started their IIoT journey, 31% are just getting started, 41% are starting to scale and only 21% are mature. This means most businesses still stand to gain the long-term benefits of digitalisation, such as full visibility into operations and reduced energy consumption.

The report goes on to explain how organisations, including utilities and other industrial players, can overcome barriers to deployment and develop a comprehensive digitalisation roadmap to determine where technology should be deployed and in what functions to demonstrate the true value of IIoT.

Antonio Martinez-Reina, Utilities & Renewables Global Leader from ABB explained: “Rather than seeing digitalisation as adding complexity to a system which is already working, digitalisation must be embraced as a means to reducing complexity, minimizing disruption and costs and ensuring greater visibility, interoperability and sustainable operations.

“Achieving digitalisation at scale requires sound planning and investment; and potentially targeting under-exploited areas for competitive advantage, such as being among the first in digitalising electrical systems.”

How circularity can improve sustainability and drive new levels of operational efficiency

The digitalisation of electrical infrastructure is explored further in ABB’s second report Tackling Throwaway Culture – a guide to embracing circular economics. This approach is particularly useful in extending the life of power distribution assets, which, when maintained, upgraded, and eventually decommissioned effectively, can deliver significant cost savings and help minimise environmental impact by avoiding emissions.

The guide offers a range of practical ideas for implementing circularity in asset management, from optimising predictive maintenance and condition monitoring to adopting a ‘component-only’ approach to retrofitting and upgrades, as well as covering decommissioning of systems, responsible end-of-life disposal and future market developments in the circular asset management space.

Thompson concluded: “Using circular economics to avoid operational emissions is an increasingly popular way of doing business sustainably for those managing power distribution assets. Thanks to advancements in technology and a more granular understanding of the role industries must play in circular economics, there is now a wealth of tools and techniques to make circularity easier to achieve.

“Our guide covers these and gives customer examples that demonstrate them in action.”

To find out more about the digitalisation and sustainability trends shaping the energy transition and how to overcome barriers to deploying IIoT and implementing circularity, the reports are: Tackling Throwaway Culture and See the potential of digital faster.

About ABB Electrification

ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimise how things are manufactured, moved, powered and operated. Building on more than 130 years of excellence, ABB’s ~105,000 employees are committed to driving innovations that accelerate industrial transformation. www.abb.com

Electrifying the world in a safe, smart and sustainable way, ABB Electrification is a global technology leader in electrical distribution and management from source to socket. As the world’s demand for electricity grows, our 50,000+ employees across 100 countries collaborate with customers and partners to transform how people connect, live and work. We develop innovative products, solutions and digital technologies that enable energy efficiency and a low carbon society across all sectors. By applying global scale with local expertise, we shape and support global trends, deliver excellence for customers and power a sustainable future for society.

go.abb/electrification.

For more information please contact:
Media Relations
Eva Ford-Murphy
Phone: +61 439 341 812
Email: eva.ford-murphy@au.abb.com

This is the key message of the IEA’s Energy Efficiency 2023 report, released today.

The flagship report states that investments in efficiency have grown by 45% since 2020, and in the past year, countries representing three-quarters of global energy demand have strengthened energy efficiency policies or introduced new ones.

Key measures are also becoming more widespread. For example, almost all countries now have efficiency standards for air conditioners, and the number of countries with standards for industrial motors has tripled within the past decade.

However, global improvements in energy intensity – the main metric used for the energy efficiency of the global economy – slowed in 2023. It is set to fall back to below longer-term trends, to 1.3% from a stronger 2% last year. The lower energy intensity improvement rate largely reflects an increase in energy demand of 1.7% in 2023, compared with 1.3% a year ago.

According to the report, this was the result of factors such as an economic rebound in energy-intensive sectors such as petrochemicals and aviation in some regions, as well as booming demand for air conditioning during what is on track to be the hottest year on record.

During a press briefing at Enlit Europe, Dr Brian Motherway, IEA Head of the Office of Energy Efficiency and Inclusive Transitions and author of the report, said:

“Last year in 2022, the world became 2% more energy efficient. In 2023, it’s a mixed story. Some regions got better, some not so much.

“One of our key asks for COP28 is a doubling in the rate of energy efficiency improvement for the rest of this decade. If we achieve that, it’ll be one of the biggest contributions to emissions reductions.

Motherway added: “We’ll see energy bills going down, we’ll see emissions going down, and we’ll see 4.5 million more jobs in energy efficiency right across the world. It can be done: the technologies and policies exist.”

Energy efficiency policy and economic growth trends

Motherway said that “…the ten biggest electricity markets saw their biggest peaks due to air conditioning, accounting for nearly three quarters for (electricity) demand.

“Policymakers are responding. Many technologies have standards being applied. But we see contradictory (figures) – standards going up but also economic growth and lifestyle changes.”

This then increases demand.

Commenting on the competitiveness between energy efficiency policy with economic growth trends, Motherway added how “the way to address this is more efficiency policy, because in some places they work hand in hand and in some cases, they do work against each other.

“For example, in some markets, we see how energy efficiency policy is making cars a lot more efficient and of course we’re seeing a lot more growth in EVs but on the other hand, we’re seeing cars becoming a lot more heavier and SUV sales growing very rapidly.

“SUVs tend to be heavier and less efficient and so in terms of energy use those issues are competing with each other. So the solution to that is more efficiency policy, more push for electric vehicles. In other cases though we’re seeing alignment between those issues.”

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Strong national gains

However, according to the report, although this slower global rate of efficiency improvements should be noted, strong gains have also been observed at the national level.

After improving energy intensity by 8% in 2022, the European Union is set to post a 5% improvement this year. The United States is also on track for a 4% improvement in 2023. Since the start of the energy crisis, more than 40 countries in total have improved energy efficiency at a rate of 4% or more for at least one year.

The report notes that consistent and widespread efficiency gains are crucial to drive down emissions, especially given expectations for global growth in electricity demand.

For example, they state how universally switching to LED technology for lighting in the United States could save enough energy to power 3 million electric vehicles per year or heat 2.6 million homes with heat pumps.

The report also finds that achieving the doubling target set out earlier in 2023 would deliver substantial benefits for governments, citizens and industry.

Under this scenario, employing workers in activities like retrofitting homes, installing heat pumps and manufacturing more efficient cars would lead to the creation of 4.5 million more jobs. It would also cut today’s home energy bills – reducing them in advanced economies by around one-third, for example. The climate impact would also be enormous.

COP28

Doubling energy efficiency improvements by 2030 would lower global carbon dioxide emissions by over 7 billion tonnes, equivalent to the emissions from the entire transport sector worldwide today, according to the report.

“The world’s climate ambitions hinge on our ability to make the global energy system much more efficient. If governments want to keep the 1.5 °C goal within reach while supporting energy security, doubling energy efficiency progress this decade is critical,” said IEA Executive Director Fatih Birol in the IEA’s official press statement.

“The findings of this report are a stark warning to the leaders gathering shortly at the COP28 climate conference in Dubai that they all need to commit to stronger action on efficiency and to deliver on it.”

Originally posted on Enlit World

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Laigneau was speaking during the opening keynote of Enlit Europe in Paris, where energy sobriety and effective demand-side management strategies proved central themes to speed up energy transition.

The discussion included more than a hint of urgency as the talk turned to more frequent and extreme weather events and the fact that climate change is increasingly impacting ecosystems across the globe.

“One thing is certain we have clear evidence of climate drift and increased frequency of weather events,” said Laigneau.

She referenced storm Ciaran that hit France at the beginning of November, which disrupted the power supply to over 1.2 million Enedis customers.

She said the impact on grid infrastructure was severe, adding that “although mitigation remains at the heart of our efforts, we need to adopt a new approach.”

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According to Laigneau, the time has come to set new ambitions to put Europe at the forefront of the energy transition and biodiversity protection. And energy companies, she added, must take the lead in this transformation and be willing to adopt a new mindset.

“Let’s not be stuck in our old ways of thinking, this is a call for all CEOs with social responsibility, we have to speed up to work with equipment companies on low-carbon solutions,” said Laigneau.

Besides a change in behaviour and a fresh mindset to drive sustainable change, Laigneau encouraged investment into networks and grid infrastructure with a decades-long life span.

Read more news from Enlit Europe 2023

Laigneau referred to grids as the “backbone of electricity systems”. She emphasised that a mindset change needs to include grids too, as they are no longer considered merely the last part of the electricity value chain as used to be the case.

For this reason, Enedis plans to invest 100 million euros in grid expansion within the next year and will continue with its Linky smart meter rollout, which has seen over 37 million meters deployed over the past six years.

Of course, it’s not only the behaviour and mindset of the current generation that needs to be adjusted. Laigneau highlighted the importance of training the younger generation to continue the momentum and work towards 2050 goals.

Originally published on Enlit World

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For over two decades, scientists and climatologists have been warning of the effects of global warming and the link to greenhouse gas (GHG) emissions, but now attention has turned to action and how we as a global society can address both the root causes and effects of climate change.

The availability of energy has underpinned social and economic growth since the dawn of the industrial revolution. While this has enabled great economic growth, this growth has come at a steep cost.

Since 1820, GHG emissions have grown 686×, leading to ~1.1°C of average global warming and a slew of significant ecological, economic, and societal consequences. These effects range from 166 million people requiring food aid due to climate crises in 2015–2019 to $3 trillion in disaster-related economic losses from 2000–2019.

If current trends hold, by 2050, the world will need twice the energy it consumes today to power the projected global developmental trajectory.

According to experts, without changes to our sources of energy and overall energy efficiency strategies, and the resulting temperature increase – the consequences could also result in the displacement of 33% of the global population, an 11% to 18% reduction in global GDP, and up to $23 trillion in annual climate-related disaster losses.

Electrification and energy efficiency

Energy growth and rapid decarbonisation require a broad replacement of fossil fuels with renewables (that is, 9× demand growth from today to 2050) and a dramatic improvement in global energy efficiency (that is, 2× increase from today to 2050).

“There is an unprecedented opportunity to cultivate the clean energy transition by eliminating greenhouse gas-generating technology through renewable-powered electrification of end applications.” said Greg Henderson, Senior Vice President of Automotive and Energy, Communications and Aerospace Group.

“As more products are designed to be powered from electricity, the broader ecosystem of power generation, distribution and storage systems comes into play. Globally, we need a flexible, resilient, efficient and secure energy system.”

“At the same time the energy grid is redesigned for renewable energy sources, there must be a focus on driving energy efficiency in all applications. In the context of total emissions, roughly 50% of global energy is consumed by industrials. Through the deployment of digital connected factory technologies, we can improve control of industrial operations within existing brownfield factories and in doing so, drive productivity which brings benefits across the full value chain and enables competitive differentiation,” said Martin Cotter, Senior Vice President of Industrial and Multimarkets Group.

“Investing in sustainability goals and driving profitability are not mutually exclusive: by investing in industrial efficiency, we have the potential to reduce energy usage but also drive competitiveness.”

Enabling electrification and efficiency at scale

Our assessment resulted in two primary categories of end solutions – those that either displace traditional, GHG-generating end technology or those that make the technology more energy efficient.

Examples of displacing technologies include electric vehicles, the energy transition and renewable energy-powered electrolysers. Examples of end products that are more energy efficient include industrial motors, 5G wireless communications and connected HVAC systems.

We recognise that ADI’s technologies are not the end products themselves. In many cases, however, the end application would not be viable without them. An example is EVs, which rely on batteries and would not be viable without battery management technology constantly assessing the health of each cell, balancing the cells within the battery pack, and ensuring that the battery is never under or overcharged. Battery management – a technology in which ADI is the market leader – is thus an enabling technology for EVs.

Another example of how ADI solutions are potentially helping to reduce CO2 emissions is with the deployment of variable frequency drives utilising ADI’s precision control technology. ADI technology enables precise adjustment of motor speed and torque to match the load under management. This saves energy by matching the capacity of the motor to the task at hand. Pairing all motors with drives could potentially save 10% of global emissions.

If end applications (like EVs or variable frequency drives) enabled in part by ADI’s technology were to be fully scaled and adopted, society could realise ~26Gt fewer GHG emissions.

Find out more on analog.com

About Analog Devices

Analog Devices, Inc. is a global semiconductor leader that bridges the physical and digital worlds to enable breakthroughs at the Intelligent Edge. ADI combines analog, digital and software technologies into solutions that help drive advancements in digitised factories, mobility and digital healthcare, combat climate change and reliably connect humans and the world.

Spain’s transmission system operator, climate and energy think-tank and collaborative NGO, respectively, have signed a Memorandum of Understanding (MoU) on the ‘Redes para Renovables’ project, stating their shared commitment to actively work towards higher environmental and social standards for grid projects.

According to Red Eléctrica, developing both new generation and grid infrastructure will require space and expose an increasing amount of people to these developments. Consequently, existing conflicts will become more visible and most likely increase.

Thus, the project’s primary objective is to establish relationships between Red Eléctrica and diverse civil society groups across Spain, as well as to support citizens and municipalities moving forward towards a net-zero energy system.

The project is driven by the need to secure societal support for the construction of vital infrastructure required to meet Spain’s ambitious climate targets, which makes stakeholder engagement the main activity to be carried out throughout the project implementation.

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Moreover, the project extends its impact beyond stakeholder engagement:

• Provides support to municipalities in developing their own energy transition strategies, offering a comprehensive guide to navigate the complex journey.
• Includes Demand-Side Management (DSM) activities, underscoring the project’s commitment to optimising energy consumption efficiently.
• Aims to disseminate information and resources, contributing to the ongoing promotion of awareness and action in relation to the energy transition in Spain.

In bringing these different activities together in one project, ‘Redes para Renovables’ aims to address the energy transition, the climate emergency and the biodiversity crisis in a holistic way – with people and nature at the core of decision-making.

Stated Fernando Ferrando Vitales, president of Fundación Renovables, in a release: “Electrification of our energy needs must be the pillar of our present and future commitment, and for this we need a robust and technologically adapted electric grid.

“To realise this, we must involve society and communicate the opportunities that lie ahead, as the ‘Redes para Renovables’ project intends to do. By creating channels for open and honest dialogue, we will make significant progress in responsible energy consumption and the decarbonisation of the economy.”

Added Beatriz Corredor, chairwoman of Redeia, parent company of Red Eléctrica, who emphasizes the importance of “promoting grid reinforcement because there is no transition without transmission. But we have to do it together with the entire territory.

“We have to listen and dialogue with the communities so that the development of these infrastructures is consistent with the enhancement of their living conditions. This is the only way to build future grids.”

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The decarbonisation of buildings is a key component of the drive for net zero but many buildings may be hard to decarbonise for a variety of reasons, including age, structure and location among others.

To address this and with the aim to identify buildings that could be prioritised for retrofitting and other decarbonising measures, the researchers from Cambridge University’s Department of Architecture have developed a new ‘deep learning’ model that they say can identify such buildings with 90% precision.

And this rate is expected to increase as more and more data is added.

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“This is the first time that AI has been trained to identify hard to decarbonise buildings using open source data to achieve this,” says Dr Ronita Bardhan, who leads Cambridge’s Sustainable Design Group.

“Policymakers need to know how many houses they have to decarbonise, but they often lack the resources to perform detail audits on every house. Our model can direct them to high priority houses, saving them precious time and resources.”

Hard to decarbonise houses are estimated to be responsible for over a quarter of all direct housing emissions but are rarely identified or targeted for improvement.

The new AI model, which was published in the journal ‘Sustainable Cities and Society’, also is expected to helps authorities to understand the geographical distribution of the hard to decarbonise houses and enable them to target and deploy interventions efficiently.

The model was ‘trained’ using a variety of data for the home city of Cambridge, including energy performance certificates as well as data from street view and aerial view images, land surface temperature and building stock.

In total, their model identified 700 hard to decarbonise houses and 635 non-hard to decarbonise houses.

With the model trained, it should be able to be applied in other British cities as well as elsewhere even where datasets are very patchy.

The researchers are currently working on a more advanced framework which will bring additional data layers relating to factors including energy use, poverty levels and thermal images of building facades.

The model is capable of identifying specific parts of buildings, such as roofs and windows, which are losing most heat, and whether a building is old or modern, but the level of detail and accuracy is expected to be significantly increased.

They also are training AI models based on other UK cities using thermal images of buildings, and are collaborating with a space products-based organisation to benefit from higher resolution thermal images from new satellites.

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The ivie and Samsung technologies will work in tandem to help household appliances automatically reduce electricity consumption, saving on energy usage.

The announcement follows last Winter’s UK-wide Demand Flexibility Service (DFS) run by ESO, the electricity system operator for Great Britain.

The DFS scheme saw households up and down the country be rewarded for delaying or adapting their electricity usage away from busy periods.

Following the launch of the ivie energy saving app – a free app with over 40,000 active users that is specifically designed to help users save energy and carbon in the home by integrating with domestic energy smart meters – ivie took part in a trial DFS scheme alongside other UK energy providers.

The ivie Flex and Save scheme was a success, encouraging users to ‘flex’, i.e. move their electricity use away from peak times of demand, and now returns, enhanced by the partnership with Samsung and its SmartThings appliance integration.

Owners of Samsung SmartThings appliances will be able to apply a ‘set and forget’ solution, allowing for the households to set up automatic settings to turn off electricity consumption where possible with minimal impact on consumer comfort throughout the events.

The partnership comes in as the role of flexibility in the UK gains prominence as a form of smart energy management.

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National Grid ESO’s DFS gives households a direct opportunity to participate in flexibility services, with 1.6 million homes and businesses successfully participating in the service last Winter.

The service aims to provide balance and stability to the energy network and enable households to be rewarded for shifting their energy away from peak demand times.

Mike Woodhall, co-founder and CEO of Chameleon Technology, commented in a statement: “Making a conscious decision to adapt energy use during peak times helps to ease the pressure on the UK’s power system.

“As homes and lives become increasingly powered by cleaner electricity, it is vital that we can be more flexible about when electricity is used. Creating good energy habits now will help create a greener energy system in the future, which is vital if we are going to achieve Net Zero targets.”

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According to the Movement – a global forum of more than 400 organisations, such as Switzerland’s ABB, Sweden’s Alfa Laval, and Microsoft – these are three of 10 key energy efficiency actions which, when applied across industry, have the potential to reduce global carbon emissions by 11% to 2030. This is the equivalent of 4 gigatonnes, with potential annual cost savings of $437 billion.

This is one of the findings highlighted in the Movement’s report The Case for Industrial Energy Efficiency, which outlines energy efficiency actions across three strategic pillars: driving efficiency returns, gaining efficiency insights and building an efficiency foundation.

Specifically, the recommended 10 key energy efficiency actions include:

Drive efficiency returns

Install high-efficiency motors

According to the report, within industrial enterprises around two-thirds of electricity consumption likely relates to powering motors in pumps, fans, compressors and other equipment.

The report adds how, if the 300 million-plus industrial electric motor-driven systems operating today were replaced with optimised, high-efficiency versions, worldwide electricity consumption could be cut by up to 10%.

The Energy Efficiency Movement also states how global commercial and industrial sectors could save up to $68.8 billion a year by 2030 from improved motor efficiency and reduced electricity use.

Use variable speed drives

The report finds that less than a third of industrial drives have variable speeds that adjust the power consumption, and emissions, to the load required. This level could be roughly doubled in most industrial settings, cutting electricity costs and emissions while saving on maintenance and reducing downtime by helping the drives last longer.

Electrify industrial vehicle fleets

According to the report, at fleet level, electric vehicles (EVs) can cut emissions by about 17% on traditional grids and 30% on electricity from mostly renewable sources.

By 2050, the reduction in emissions could amount to 70% under a decarbonised grid scenario.

Maintain efficient heat exchangers

According to the Energy Efficiency Movement, heat exchangers, used widely in building heating and air conditioning, refrigeration, and data centre and fuel cell cooling, are rarely maintained adequately.

This lack of maintenance, according to the report, could account for up to 2.5% of global carbon emissions – roughly the equivalent of the entire airline industry. And new heat exchangers can be up to 25% more efficient than old ones.

Switch to heat pumps

According to the report, heat pumps are extremely efficient, effectively giving back more energy than put in to operate them.

In time, they state, it is likely that all low-temperature and many mid-temperature industrial applications, such as drying and ethylene processing, will use heat pumps.

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Gain efficiency insights

Deploy smart building management systems

According to modelling by the Energy Efficiency Movement, widespread use of building management systems (BMS) could yield annual electricity savings of between 994TWh and 1.5PWh a year by 2030, while cutting annual gas use by 126 to 252TWh.

This could deliver between 593 and 901 MtCO2 emissions savings a year. Taking a mid-point estimate, this could create almost 3.5 gigatons of savings between 2024 and 2030.

A BMS, states the report, can control up to around 70% of a building’s energy load if lighting is included as well.

Combining AI with a digital BMS can cut HVAC emissions by as much as 40% and reduce energy costs by 25%.

A smart BMS can also save substantial proportions of a building’s energy use costs through detection, diagnostic, historical analysis and predictive capabilities.

For example, states the report, the deployment of smart BMS in a facility in Bengaluru, India, resulted in building operational and management cost savings of up to 10% and a 19% saving in energy management costs. The deployment of smart BMS also resulted in emissions savings of up to 34%.

Move data to the cloud

According to the report, there are at least three reasons cloud data centre operators will tend to have greater efficiency savings.

Cloud computing and co-location facilities usually operate at a much higher level of efficiency compared to smaller, on-premises servers.

Energy use accounts for a significant percentage of a cloud operator’s overall operating expenses, so there is a strong financial incentive to optimize the operational efficiency of IT equipment.

Advanced infrastructure technologies in hyperscale data centres reduce the energy for lighting and cooling the facility.

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Building an efficiency foundation

Audit operations for energy efficiency

According to the report, most industrial enterprises waste large amounts of energy, yet they do not know it. Oversized machines, assets on standby and poorly maintained hardware all contribute to ghost loads that use power without any useful output.

The only way to locate these loads is to carry out an audit.

Usually undertaken by an established energy service company, an audit will give a baseline against which to measure progress on efficiency, as well as potentially contributing to broader aims such as the achievement of ISO 50001 certification.

Audits should be repeated at regular intervals and if accompanied by a sensor deployment programme can lead to continuous monitoring of energy use across the enterprise, allowing savings to be achieved in real time.

Right-size industrial assets and processes

According to the Movement, most industrial assets tend to be oversized for a range of reasons, such as building in safety margins or allowing processes to cope with peaks in demand. The extent to which this oversizing is useful varies greatly from one industrial enterprise to another, however.

While there are no hard-and-fast rules about the level of energy and emissions reductions that can be achieved through right-sizing equipment, states the report, the improvements can be significant.

The report cites an example of a company that was able to remove an entire packaging line, saving $1 million a year.

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Bring connectivity to physical assets

Despite the significant benefits that can be achieved by integrating industrial assets into an Internet of Things (IoT) network, ABB survey data, cited within the report, indicates that only 35% of enterprises have so far undertaken industrial digitisation programmes at scale.

Such programmes could help reduce industrial energy use by between 10% and 30%, based on estimations from organisations such as McKinsey & Company and the American Council for an Energy-Efficient Economy.

The Energy Efficiency Movement estimates that bringing connectivity to currently unconnected industrial assets could save 10% of their electricity and 5% of their natural gas consumption under a low-efficiency scenario, and 22% and 11%, respectively, in a higher growth outlook.

“Ahead of COP28, it is important to demonstrate that there are mature and concrete technology solutions readily available to address the global warming issues we are facing,” said Tarak Mehta, president, Motion business area at ABB.

“Since renewables can only provide a part of the answer, the critical role energy efficiency plays in accelerating the energy transition toward reaching net-zero emissions by 2050 is undeniable. The urgency is for the private sector to act now.

“This new report is designed to help speed the adoption of best practices by showing businesses how to realise the full potential of environmental and financial benefits.”

AI – the energy challenge

As artificial intelligence is finding use in an ever-growing variety of applications concerns are emerging – alongside those of its civilisation destruction potential – of its energy consumption.

In a new article, Dutch doctoral candidate Alex de Vries suggests that whereas data centre electricity consumption has been relatively stable in recent years, at around 1% of the global electricity consumption, the rapid expansion of AI in the past two years – not least with the emergence of ChatGPT in late 2022 – could lead to a surge with the computational resources necessary to develop and maintain such AI models and applications.

De Vries comments that much of the focus on AI energy consumption has focused on the ‘training’ phase, which is when AI models are fed the datasets from which they ‘learn’ and which has been considered the most energy intensive.

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However, the ‘inference’ phase, when the models are deployed and generate outputs based on new data, also can be significant and potentially significantly higher.

As an example, he investigates that if Google were to integrate generative AI into every search, the energy consumption per search could increase by 10 times and in a worst-case scenario annually could total up to 29.2TWh, which is similar to a country such as Ireland.

De Vries notes that the exact future of AI-related electricity consumption remains difficult to predict but scenarios suggest tempering both overly optimistic and overly pessimistic expectations.

He also suggests that while developers should focus on optimising AI, they also should critically consider the necessity of using AI in the first place, as it is unlikely that all applications will benefit from AI or that the benefits will always outweigh the costs.

A digital currency for clean energy trading in Japan

Japanese digital currency business DeCurret in partnership with the telco company Internet Initiative Japan have announced their intention to launch what may be a first with a digital currency for trading on the country’s Electric Power Exchange.

IIJ is joining the JEPX as a non-fossil value trading member and plans to start offering a service to procure clean energy certificates.

From July 2024, the service will utilise the DeCurret’s network to convert environmental values into digital tokens and start settlement using the digital currency, tentatively named ‘DCJPY’.

Currently, in Japan environmental value transactions are generally handled by issuing analogue certificates and managing transaction information in centralised systems. With DeCurret’s DCJPY network the issuance, transfer, etc. of such certificates would be enabled as digital assets, with automated settlement through programmed transactions using digital currency and smart contracts.

In the future, the companies intend to promote the distribution of a series of environmental value transactions on the blockchain with the participation of electricity retailers, power generation companies and environmental value exchanges.

Seiichiro Hamada, Executive Officer and deputy General Manager of the Innovation Promotion Division of Kansai Electric Power, says the company is working to promote carbon neutrality through the use of digital currency.

“Digital currency has great potential for trading environmental values, and the fact that this first social implementation is the settlement of non-fossil certificates at IIJ’s data centre is a major driving force for the future.”

Generating clean electricity with chicken feathers

With all the chickens consumed around the world, some 40Mt of feathers are believed to be incinerated annually, with the adverse environmental effects that result including the emissions of CO2 and other gases such as sulphur dioxide.

But that may become something of the past, with new research from ETH Zurich and Nanyang Technological University Singapore (NTU) demonstrating that a simple and environmentally friendly process can be used to extract the protein keratin from the feathers and convert it into ultra-fine fibres known as amyloid fibrils. These keratin fibrils can then go on to be used in the membrane of a fuel cell.

In conventional fuel cells, the membranes have so far been made using chemicals, which are expensive and don’t break down in the environment. The ‘chicken feather’ keratin membrane, on the other hand, is environmentally compatible and with the abundance of such keratin is already up to three times cheaper.

“[This] latest development closes a cycle,” says Raffaele Mezzenga, Professor of Food and Soft Materials at ETH Zurich.

“We’re taking a substance that releases CO2 and toxic gases when burned and used it in a different setting: with our new technology it not only replaces toxic substances but also prevents the release of CO2, decreasing the overall carbon footprint cycle.”

The next step for the researchers is to investigate the stability and durability of the keratin membrane and to improve it if necessary. A joint patent has been filed and the search is on for investors to develop the technology further and bring it to market.

In its second five-year review, the Commission highlights the need for urgent action in the energy sector including the phasing out of fossil fuels and electrification of the system to meet net zero and the need to improve asset and resource management in the water sector to ensure that the demand does not outstrip supply.

While there is still a long way to go in creating a secure net zero energy system, it is achievable with the right policies and a relentless focus on delivery, the Commission states in its report.

“The good news is that modern, reliable infrastructure can support economic growth, help tackle climate change and enhance the natural environment,” writes Commission chair Sir John Armitt in the foreword to the report.

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“We stand at a pivotal moment in time, with the opportunity to make a major difference to this country’s future. But we need to get on with it.”

Net zero energy sector

Among actions recommended is accelerated deployment of offshore wind, onshore wind and solar power and support to the market to deploy the necessary accompanying flexible technologies, i.e. electricity storage and demand side response.

Investment also should be incentivised in large scale hydrogen and gas with carbon capture and storage power stations that can provide electricity even during extended calm or cloudy periods, while a “transformational change” is required in planning, regulation and governance to expand the transmission and distribution networks.

On electrification the Commission recommends electrifying heating with heat pumps, stating that there is “no public policy case” for hydrogen to be used to heat individual buildings and that it should be ruled out as an option.

To deliver this households should receive a subsidy of £7,000 ($8,481) and up to £4 billion ($5 billion) per year should be allocated to support lower income households.

There should be increased adoption of electric vehicles, with a nationwide network of at least 300,000 public charge points across the country by 2030.

The core networks to transmit and store hydrogen and carbon to decarbonise the industrial sector also need to be put in place around the country.

Smart water metering

Regarding the water sector the Commission states that without action to adapt to a changing climate there could be an over 4,000Ml per day gap between the demand and supply of water by 2050.

A twin track approach to drought resilience should be followed, both managing demand, including leakage, and increasing supply.

To this end on the supply side at least 1,300Ml/day should be provided by the mid-2030s through additional water transfers and supply infrastructure.

On the demand side, the objective to halve leakage from 2017-18 levels by 2050 should be maintained and compulsory metering beyond water stressed areas enabled by 2025, with the systematic rollout of smart meters a first step in a concerted campaign to reduce water demand to 110l per person per day and to reduce non-household usage by 15% by 2050.

These actions and others across other infrastructure sectors, including transport and digital connectivity, are estimated to require an increased investment from an average £55 billion ($66.6 billion) per year over the last decade (around 10% of UK investment) to around £70 to 80 billion ($85-$97 billion) per year in the 2030s and £60 to £70 billion per year 2040s.

Public sector investment will need to rise from £20 billion ($24 billion) per year over the last decade to around £30 billion ($36 billion) in the 2030s and 40s.

Private sector investment also will need to increase from around £30 to 40 billion ($36-$49 billion) over the last decade to £40 to £50 billion ($49-$61 billion) in the 2030s and 2040s. This includes around £20 to £35 billion ($24-$42 billion) per year between 2025 and 2050 in renewable generation capacity and flexible sources of generation, electricity networks, and hydrogen generation, storage and networks and a carbon capture and storage network.

The plan, which has been approved by the New York Public Service Commission, encompasses a range of actions including $6 billion in investments to enhance reliability, resiliency and customer service and to support the meeting of the state’s climate targets.

Its approval follows a more than a year-long engagement with a trimming of the original rate requests by nearly half and will result in the average residential customer’s monthly bill increasing by approximately $10 beginning November 1, 2023.

“The forward-looking plan we have adopted benefits customers and includes provisions that further important state and Commission objectives,” commented Commission chair Rory M. Christian.

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“With [the] decision, NYSEG and RG&E are required to pursue important energy efficiency initiatives among other progressive policies, to advance the goals of New York State’s nation-leading climate change targets, while mitigating bill impacts for most low-income customers, as part of New York’s energy affordability policy.”

NYSEG and RG&E president and CEO, Trish Nilsen, said the Reliable Energy New York plan “will allow us to make critical investments in our gas and electric infrastructure to improve reliability, expand our energy efficiency offerings, execute on important pilots to test new technologies to support our green energy future, and provide additional assistance to those who need it.”

Reliable Energy New York highlights

Among highlights of the plan is a continuance of the companies’ gas safety performance mechanisms in the areas of leak management, emergency response, damage prevention, gas infrastructure reduction or replacements, and compliance with safety regulations and procedures.

In addition, at least 130km of leak prone pipe must be replaced over the next three years and the residential methane detection programme continued.

At the same time the companies will continue their commitment to achieving a net zero increase in gas use and to consider suitable non-pipes alternatives to the construction of a new or replacement of existing pipeline.

Vegetation management is another important aspect and routine trimming, danger tree mitigation and reclamation of overgrown circuits will be stepped up.

The plan also requires the companies to develop their physical and cyber security posture to match the evolving state of the New York electric grid and the challenges to security, resilience and reliability that it faces.

The plan also increases the amount devoted to low-income customer assistance and to expand the language access programmes to ease communication for the immigrant communities, as well as to provide special protections against shutoffs and terminations during extreme cold weather.

NYSEG serves approximately 894,000 electricity customers and 266,000 natural gas customers in upstate New York.

RG&E serves approximately 378,500 electricity customers and 313,000 natural gas customers in the region surrounding the City of Rochester.

The pillars include a revised Renewable Energy Directive and the REFuelEU Aviation Regulation.

Under these pillars, the EU has updated targets on renewable energy and energy efficiency, and will phase out new polluting vehicles by 2035, while boosting charging infrastructure and the use of alternative fuels in road transport, shipping and aviation.

The overall package also includes a target to boost natural carbon sinks and an updated emissions trading system to cap emissions, put a price on pollution and generate investments in the green transition.

The revised CO2 standards regulation will ensure that all new cars and vans registered in Europe will be zero-emission by 2035. As an intermediary step towards zero emissions, average emissions of new cars will have to come down by 55% by 2030, and new vans by 50% by 2030.

The new Regulation for the deployment of alternative fuels infrastructure (AFIR) sets mandatory deployment targets for electric recharging and hydrogen refuelling infrastructure along European roads.

In this way, states the Commission in a press release, publicly accessible recharging infrastructure for cars and vans will grow at the same speed as the EV fleet.

ReFuelEU Aviation also sets out EU-wide harmonised rules for the promotion of sustainable aviation fuels (SAF), with an increasing minimum share of SAF required to be blended with kerosene by aviation fuel suppliers and supplied to EU airports.

The FuelEU Maritime Regulation will promote the uptake of renewable and low-carbon fuels through the establishment of a target for gradual reductions for the annual average GHG intensity of the energy used onboard by ships.

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A fair transition and competition

To ensure a level playing field for European companies, the new Carbon Border Adjustment Mechanism ensures that imported goods pay an equivalent carbon price on targeted sectors.

In combination with the EU Emissions Trading System, it reduces the risk of ‘carbon leakage’, whereby companies would move their production out of Europe to countries with less strict environmental standards.

Carbon pricing and an annual emissions cap aim to ensure that polluters pay, and that Member States generate revenues which they can invest in the green transition. The revised EU emissions trading system gradually extends carbon pricing to new sectors of the economy to support their emissions reductions, in particular transport and heating fuels, and shipping.

With this reform, Member States will now spend 100% of their emissions trading revenues on climate and energy-related projects and the social dimension of the transition.

The newly-created Social Climate Fund will dedicate €65 billion ($68.7 billion) from the EU budget, and over €86 billion ($90.9 billion) in total to support the most vulnerable citizens and small businesses with the green transition.

Boosting renewables and saving energy

The agreement on the revised Renewable Energy Directive sets the EU’s binding renewable energy target for 2030 at a minimum of 42.5%, up from the current 32% target. In practice, this would almost double the existing share of renewable energy in the EU. It is also agreed that Europe will aim to reach 45% of renewables in the EU energy mix by 2030.

On the Energy Efficiency Directive, negotiators agreed to a new EU-level target to improve energy efficiency by 11.7% by 2030. Member States will have to make annual savings of an average of 1.49% from 2024 to 2030. The public sector will lead the way, with a 1.9% annual savings target.

The agreement also includes the first ever EU definition of energy poverty. Member States will now have to implement energy efficiency improvements as a priority among people affected by energy poverty.

European Commission President Ursula von der Leyen said: “The European Green Deal is delivering the change we need to reduce CO2 emissions. It does so while keeping the interests of our citizens in mind and providing opportunities for our European industry.

“The legislation to reduce our greenhouse gas emissions by at least 55% by 2030 is now in place, and I am very happy that we are even on track to overshoot this ambition. This is an important sign to Europe and to our global partners that the green transition is possible, that Europe is delivering on its promises.”

Next steps

The implementation of the Fit for 55 legislation is now starting in the Member States. The National Energy and Climate Plans (NECPs) currently being finalised by Member States will need to integrate this new legislation and demonstrate how the 2030 climate and energy targets will be met at national level.

The Fit for 55 package was tabled in July 2021 to respond to the requirements in the EU Climate Law to reduce Europe’s net greenhouse gas emissions by at least 55% by 2030.

It was updated when the Commission proposed increased ambition on renewable energy and energy efficiency in the REPowerEU plan to respond to Russia’s invasion of Ukraine and boost Europe’s energy security.

The final legislative package is expected to reduce EU net greenhouse gas emissions by 57% by 2030. While this legislative package is a central part of the European Green Deal, work continues on other pending legislative files and proposals and on the implementation of legislation in the Member States.

Energy Systems Catapult, which provides technical, commercial and policy expertise on energy innovation, suggests that innovative products and services designed to aid the transition could unfortunately exacerbate or introduce new barriers for these consumers.

Energy Systems is collaborating with management company Carbon Trust and market researcher Ipsos to implement the ISS programme, funded by the Department for Energy Security and Net Zero.

The £2.75 million ($3.33 million) programme will be divided into two phases through to March 2025, with the first one underway.

In phase 1, Energy Systems Catapult, with support from the Carbon Trust, has launched a ‘Request for Information (RFI) for the Inclusive Smart Solutions Delivery Team’ to solicit input from various stakeholders, including industry professionals, technology developers, energy networks, academia, research institutions and others.

The RFI aims to gather information on:

• Existing and potential solutions for consumers who may face difficulties participating in the emerging smart and flexible energy system.
• Specific barriers that LIV consumers encounter and the targeted solutions being developed to address these challenges.

The information collected through the RFI will provide valuable market insights into existing innovations and solutions, as well as the barriers identified by stakeholders already involved in this field.

The objective is to identify innovations that can unlock potential and support future developments for the LIV consumer market, spanning both demand-side vectors and supply-side technologies.

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Phase 1 also involves working with Ipsos to conduct primary research with LIV consumers to gain a deeper understanding of their needs and existing barriers.

The insights gathered from this research will inform the development of innovative solutions tailored to these consumers. This phase will also include an ‘Open Innovation’ selection process to identify up to four innovative solutions, both from within and outside the energy sector.

Commented Becky Sweeney, business leader of homes at Energy Systems Catapult: “The work we are doing aims to face these hurdles head-on, to help us learn from the experiences of LIV consumers, to create a smart, flexible energy system that works for everyone and where no one is left behind.

“We’d like to invite stakeholders from across industry – from clean tech innovators to energy research institutions – to respond to our Request for Information to help shape the energy system of the future.”

The funding for the programme comes courtesy the Department for Energy Security and Net Zero’s £65 million ($78.7 million) Flexibility Innovation Programme, part of the UK Government’s broader £1 billion ($1.2 billion) Net Zero Innovation Portfolio dedicated to financing low-carbon technologies and systems.

The programme is also being delivered as part of Energy Systems Catapult’s Fair Futures Programme, which explores the opportunities for innovation to address fuel poverty and better understand the issues faced by vulnerable energy consumer groups in the UK.

The new network, which was initiated by the Federal Association of the Energy and Water Industry (BDEW), includes the network operators E-Netz Südhessen, Harz Energie Netz, MVV Netze GmbH, Netze Duisburg, Schleswig-Holstein Netz, Stromnetz Berlin and Stromnetz Hamburg.

In addition to security of supply and cost-effectiveness, network operators are increasingly focusing on energy efficiency and climate protection.

According to BDEW, the network, by bringing the operators together, will attempt to overcome challenges associated with integrating renewable energies into the supply mix and increased requirements for documenting one’s own energy consumption.

Kerstin Andreae, chairwoman of the BDEW board of directors, welcomed the re-establishment of the Network: “The exchange of experiences with the other network operators makes it easier to implement energy efficiency measures in companies.

“Potential energy saving opportunities can be identified together and corresponding investments can be implemented more efficiently and in a more targeted manner.”

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In total, almost 400 energy efficiency networks have already been registered with the nationwide Energy Efficiency Networks initiative.

Especially in an industry-specific network, similar challenges can be better addressed and technical solutions can be made accessible to everyone involved, stated the Federal Association in a press release.

The network is moderated on behalf of the participants by Green Navigation GmbH, which has already moderated numerous networks, including the first round of the network operator network. The new network is open to other potential participants.