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Transactive networks in the New Zealand retail context


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Advisian’s Jamie Silk explains how the sharing economy can also include energy

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Transactive networks in the New Zealand retail context

  1. 1. Transactive NetworksJaime Silk, Advisian | December 2016
  2. 2. Technological, social and digital shifts are creating new and exciting opportunities for the energy market
  3. 3. Great innovation is being developed, helping people and businesses bypass many market barriers. For example, peer- to-peer energy trading, community energy platforms, smart homes products, grid assisted PV. There is real value in the transactive grid, where every day people buy and share electricity with each other, dynamically changing behaviours to meet their personal goals. However, for this to be a success, everyone must be across the grid’s vision and value.
  4. 4. The Transactive Grid
  5. 5. Components of a transactive grid experience include: The Sharing and Social Economy TheInternet ofEnergy Big Data and Analytics ConsumerEnergy Assets
  6. 6. Many are innovating to find the sweet spot: PV/ESU Sale PV/ESU Lease IHD/ Smarts Securitise Peer-to-Peer Community Schemes ESU/DR Services Mobile Bills (EV, PV) Energy Advising Integrated Billing Seeking Opportunity From Technologies Consumer Energy Assets | IOT | Analytics | Social | Digital Innovating to Meet Business Constraints Lower cost to service | Reduced churn | Agile | Low/flexible investment Deepening Consumer Relationships Differentiating from price | Driving acquisition/retention. Creating Value Create and capture value for consumers | Cutting risk profiles Examplesofservice/productinnovationthatishelpingtofindthe‘sweetspot’
  7. 7. Whilst others are holding back until they see the value: “The market is healthy.” “New tech take up is tiny.” “Its too early to invest.” 80% renewables in New Zealand – technically and economically does more investment make sense? 11% more consumers on TOU Record switching 1.7% Retail Price Fall, 1st In 15 Years 77% growth in installed PV Innovation in players & offers 2105 EA KPIs
  8. 8. Transactive grids are where we all come together to create value, but… They mean different things to different parties who speak different languages: Micro-grids Distributed Energy Resources Peer-to-Peer Community Energy Distributed Systems Operators Mobile Power Bills Virtual Power Plants
  9. 9. The starting point is the consumer telling us things aren’t right… • Prosumers become very engaged consumers • Retail prices drive frustration, which drives self-use of PV (60-70%) • For incumbents this is volume ‘lost’ (25-33%) The result… • Prosumers bear more ‘costs’ • The system ‘pushes’ up prices Supplied kWh PV Kwh
  10. 10. Stepping into the sharing economy
  11. 11. When someone has a surplus of something – space (Airbnb), underused car and time (Uber) – this can be ‘shared’ with and used by people who need or want these things at a lower price point and more conveniently. ‘Sharing’ can also apply to energy… With a few changes in people’s habits, 88% of PV from one home can be consumed instantly across 3 homes*. Gridmates *Research homes, EEA Conference 2106
  12. 12. The sharing economy works because… Everyone is different • Habits • Flexibility • Motivators • Physical environment People’s ability to change their use of energy is a factor of their material environment, learned energy practices and learned habits. Material Culture ‘Be frugal’ Energy Practices Material Culture ‘Make it happen’ Energy Practices Material Culture ‘Be efficient’ Energy Practices Material Culture ‘Make it easy’ Energy Practices Energy Economic Energy Extravagant Energy Efficient Energy Easy Energy consumers’ habits can be grouped into 4 groups: Energy extravagantEnergy poor Energy efficient Energy easy
  13. 13. Sharing creates value through… Least cost to change Social connections Incidental demand Productive sites Efficient use • Matching prosumers’ solar PV generation to consumers (sharesumers) who have the least cost to change energy use to use that generation • Sharing surplus solar PV with someone’s demand that already matches your production • Creating incentives for investing in solar PV at productive sites rather than simply at home • Finding the best use for generation • Connecting with people who want to achieve the same goals as you
  14. 14. Connecting people in networks around technology can: • Make customers sticky (i.e. mobiles) • Turn customers to advocates • Create a multiply effect (i.e. one engaged prosumer can draw in two to three sharesumers) • Open doors to new conversations Sharing on networks spreads costs of fixed assets (i.e. reducing everyone’s prices).
  15. 15. But how do you engage 1000s of people on potentially millions of devices?
  16. 16. A Chain Reaction? Sharing needs trust. In reference to the transactive grid, trust needs a meter. For now… blockchain offers a distributed database technology that can securely log every transaction or event in real time, with instant access for automated decision, reconciliation or settlement… …anywhere, to any device. For example: 2 Nov 2016
  17. 17. Stepping into the digital economy – the new energy conversation
  18. 18. Frank and other AI apps start relevant, low cost dialogues A conversation that is automated Frank – one of the next generation of intelligent personal assistants - looks at what is known about us and starts a relevant conversation at a time when we are likely to be interested.
  19. 19. For example…
  20. 20. Frank and other AI apps start relevant, low cost dialogues Scenario 1: Frank knows from past behaviours I like ‘green’ stuff so am likely to be interested in solar PV. Frank uses the weather to wait for several sunny days when I will have seen lots of solar PV producing ‘free’ energy for others and starts a conversation. A conversation that is automated
  21. 21. Frank and other AI apps start relevant, low cost dialogues Scenario 2: Frank knows solar PV can’t go on my roof (might know I rent etc.) but still like ‘green’ stuff, so after several sunny days Frank asks if I want to share in other peoples solar PV. A conversation that is automated
  22. 22. Frank and other AI apps start relevant, low cost dialogues Scenario 3: Frank sees when I have had a very big power bill so targets a ‘can I help you’ question when it comes through. A conversation that is automated
  23. 23. A conversation that is informed and relevant Smart meter data and analytics enable a relevant, targeted dialogue. Underlying (estimated) activity can include: • Morning showers • Day time load • Peaky discretionary load • Peaky winter heating • Sustained winter heating … add personal history and local context, and offer real help. Chart Source: Piclo
  24. 24. A conversation that is digitally targeted to business or consumer value A data analytics model can link back to value drivers, including: • Network constraints and prices • Energy market price peaks • Reserves • Renewable or low GHG generation • Surplus PV … connecting markets, consumers and appliances. Source: Enphase Source: EA Source: Orion
  25. 25. Sharesumers can be offered specific choices tailored to: • Their load analysis • Known preferences • Physical appliances … the Internet of Things (IoT) extends convenience, choice and trust. Hi, care to share some load and save on your bill? Select options Scheduled appliance Managed water Get text prompts Hi, there is local PV available, want to share in it? Select options A conversation that is personalised Scheduled appliance Managed water Get text prompts
  26. 26. A conversation connecting people Prosumers and sharesumers can be engaged to share by inviting other consumers to use the system and drive behaviour change. Source: Gridmates Hi, find your friends and neighbours. Invite to share. Peter H The kids Local suggestions
  27. 27. A conversation that can help to do some good in the community For example: “Don’t get angry at feed in prices, donate and feel good!” “Rent a roof from the school or a neighbour in need.”
  28. 28. Relevant, intelligently targeted services can be shared between many participants, including: • Solar city (i.e. PV, ESU, self use) • First gas and supply chains • Mitre 10 – smart thermostats, appliances, insulation • Share PV in town - where your EV is parked A conversation that creates value through a transactive ecosystem Hi, we think we can meet your needs better. Hi, your heating energy use looks high. Our friends can help. Off peak bonuses Better solar use Check out PV EV Extras Battery Payout Cut my bill Using plug in heaters Need comfort Cut my impact
  29. 29. Transactive grids for consumers can be personal and simple when we all participate.
  30. 30. When innovators and incumbents start to think: Digital | Social | Connected
  31. 31. …we will create value for everyone
  32. 32. DISCLAIMER This presentation has been prepared by a representative of Advisian. The presentation contains the professional and personal opinions of the presenter, which are given in good faith. As such, opinions presented herein may not always necessarily reflect the position of Advisian as a whole, its officers or executive. Any forward-looking statements included in this presentation will involve subjective judgment and analysis and are subject to uncertainties, risks and contingencies—many of which are outside the control of, and may be unknown to, Advisian. Advisian and all associated entities and representatives make no representation or warranty as to the accuracy, reliability or completeness of information in this document and do not take responsibility for updating any information or correcting any error or omission that may become apparent after this document has been issued. To the extent permitted by law, Advisian and its officers, employees, related bodies and agents disclaim all liability—direct, indirect or consequential (and whether or not arising out of the negligence, default or lack of care of Advisian and/or any of its agents)—for any loss or damage suffered by a recipient or other persons arising out of, or in connection with, any use or reliance on this presentation or information.