The big shift to renewables requires energy flexibility
Historically, electricity generation has been fossil-fuel based – although other methods such as hydropower have been available since the 1900s – coal, oil and gas still dominate today. This is, in part, due to the ease of storing and transporting fossil fuels, thanks to their high energy density. However, this method of energy production is one of the main drivers of the climate emergency, accounting for nearly ¾ of global greenhouse gas emissions. The ongoing war in Ukraine has also served as a stark reminder for many countries of the security risks of traditional energy supply, with electricity generation costs still mostly linked to the wholesale price of gas.
Nations across the world are now accelerating their renewable energy plans and easing their reliance on foreign fossil fuels. Speeding up the deployment of renewables will, however, need to go hand in hand with a deeper understanding of energy consumption. The double whammy of intermittent supply and higher, more unpredictable demand loads – including that from electric heat and transport – means that energy retailers and regulators will need to find new ways to shift consumption patterns quickly and efficiently to ensure a balanced and reliable grid.
Boosting data with smart meters and granular settlement
The roll-out of smart meters and movement towards granular settlement is a positive start, which will provide a clearer picture of energy demand and consumption for utilities who can handle the significant increase in data from the number of reads. Increasing the granularity of settlement will urge modern energy retailers to provide innovative tariffs which incentivise energy consumption during low-cost, low-carbon hours.
The good news for today’s energy retailers is that innovative technology exists to further support their transformation, and enable them to innovate and adapt to current market conditions. Technology such as Kaluza’s Energy Retail solution utilises historical and real-time consumption data, as well as predictive algorithms, to accurately forecast domestic energy demand. Through a deeper understanding of the data available, retailers, customers, and the wider energy industry can make significant progress towards energy flexibility.
Turning customers into active participants of the energy transition
The next question is how to engage customers. The energy industry has fallen behind the curve when it comes to digital innovation, and the space is ripe for disruption. At Kaluza, we want to enable energy customers to participate in the energy transition by providing retailers with the customer experiences, tools, insights and incentives necessary to shift energy behaviour. Our Kafka-based data architecture allows for live access to energy data, encouraging customer interaction with their energy consumption and carbon impact.
Price signals can be one of the most powerful ways to shift consumption loads to off-peak times, linking them to renewable energy availability. Thanks to advancements in technology, innovative tariffs can be rolled out within days rather than months, enabling retailers to test and introduce tariffs which help customers use clean, locally-sourced energy.
Transport and heating are also increasingly becoming part of the domestic electricity network. Sales of new petrol and diesel cars are set to end by 2030 in the UK and 2035 in the EU, with many other regions also implementing electric vehicle (EV) and heat pump targets. Kaluza is working with leading energy companies like OVO to power tariffs such as OVO Drive + Anytime and Heat Pump Pro, to transform how customers travel, power and heat their homes with low-carbon electricity – a triple win!
Besides innovative tariffs for OVO customers, Kaluza manages Vehicle-to-Grid (V2G) – bidirectional EV charging – through its demand response solution, Kaluza Flex. The platform has demonstrated how software-enabled V2G can help balance the grid during unprecedented demand, for example, during lockdown in 2020 and the UK’s summer heatwaves, by enabling customers to sell their EV’s surplus clean energy back to the grid. These novel propositions are seamlessly integrated into the existing customer experience, providing a simple and engaging way for users to participate in the energy transition.
Dedicating more time and money to innovation
Finally, by generating operational cost savings of 30-50% through improved data management and automation compared to legacy solutions, Kaluza Energy Retail enables retailers to invest in positioning themselves for a decarbonised future. With an increased innovation spend, retailers can test new propositions quickly and lead their partners and customers to decarbonisation.
By embracing the opportunities brought on from renewable energy capacity ramp-up, granular settlement and data, energy retailers can create deeper engagement with customers. Kaluza helps energy retailers to make this vision a reality so that together we can power a world where net zero is within everyone’s reach.
