Energy production and consumption are going through a massive transformation due to climate change and digitization.

FREMONT, CA: The structure, engineering, and primary mission of the world's utility systems are reevaluated by the global power and utility industry. New forces are merging to motivate energy market participants to increase the sophistication, complexity, and automation of the grid. It involves climate change, rising energy demands, and new market participants' implementation like plug-in hybrid electric vehicles (PHEVs).

Industry visionaries assume that the smarter grid will need to incorporate power flows and data on consumption and pricing. These flows will be bidirectional between utilities and their customers, particularly as more people become electricity producers.

In response to the upsurge of distributed generation sources, utilities will almost certainly have to develop entirely new business models. This is likely to be the next generation of smart energy ecosystems, which will need to be even more advanced and complex than the smart grid used today.

The emergence of a smart grid

The grid made of the latest or innovative grid-connected devices will allow the smart energy ecosystem to provide several new abilities that can react to and drive transforming consumer behavior and perception towards energy.  

For example, the power from the solar arrays on the rooftops of commercial buildings and private homes must be accepted by the smart energy ecosystem. It will also have to incorporate the variable, but significant power produced by wind farms. When millions of people own PHEVs, a smart energy ecosystem may allow them to purchase electricity from the grid during off-peak hours late at night. If the utility ever needs more power during a peaking event, it will tap into the fleet's stored energy.

Indeed, utilities are already implementing various devices with microprocessors and two-way communication that will allow a variety of previously unattainable capabilities, such as data collection, local decision-making, and coordination.

Changing demands

The new smart energy economy can encourage utilities and market participants to form a range of new relationships and embrace business models that will develop as the smart grid's shape becomes more apparent and more opportunities are revealed.

Indeed, we believe that as the smart energy ecosystem evolves, these new relationships and changing models will be among the more interesting outcomes. In this new business environment, it will be critical to have a simple architecture to help capture opportunities as they arise.

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