Two Billion Dollar Opportunities for Innovation in the Energy Market

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Innovation in the Energy Market – If you believe the news, we are in the midst of an energy crisis. Ignoring the politicking, today we examine two areas of the energy market that are ripe for innovation. In our previous post, we spoke about the number of businesses now looking to become energy retailers. Much of this is driven by business models looking to innovate the energy market.

Innovation in the Energy Market
Photo by Marcus Wallis on Unsplash
By Connor James, Compliance Quarter.

Demand Management that People Care About

Countless providers offer an ‘app’ or device to help you manage your energy. Most of them fail.

The promise is simple—give people more power over how and when they use, store, or export energy. In doing so, savings can be achieved, inefficient appliances can be identified, and money can be made ‘trading’ energy back to the grid. Energy can be exported in a way that takes advantage of the volatility of pricing of energy in the wholesale electricity market.

AEMO has identified demand management as key to reduced consumption and to increased grid stability. In the water industry, demand management has had a significant and lasting effect.

There is a problem with many of the demand management apps currently available. People just don’t care. Individual consumers are time poor and have more than enough applications on their smart-phones.

The challenge is to make this process interesting, to automate it (perhaps using AI) and to embed it. A similar problem exists in the number of consumers who could be on a better energy deal but are not. It needs to be fixed but it won’t be fixed without consideration of useability.

Innovation in the Energy Market

Microgrids and embedded generation

Microgrids are embedded networks on a larger scale. They overcome the issue of network fees, arbitrarily charged to each household, and present an opportunity for embedded generation. Our current grid is built on centralisation and heavy reliance on transmission. This is ineffective.

Establishing microgrid community ‘hubs’ allows for decentralisation and increased ‘grid security.’ Voltage can be managed at an individual ‘hub’ level and energy can be traded between households and between hubs or communities. In establishing a network of hubs and connections, the money that traditionally goes towards network and transmission can be re-invested at the community level in areas such as energy efficiency.

There are challenges to be overcome with microgrids. Regulatory hurdles are the greatest challenge. Re-wiring a sub-burb requires a distribution licence or exemption and requires rights to use public space.

The above two examples are obvious. Some opportunities are not so obvious. One area of significant concern in the energy market is the management of hardship. There are too many customers being disconnected and too many customers who cannot afford to pay their bills. Find a way to solve that problem and you will have a real impact.

Compliance Quarter is always working with a wide range of energy retailers. For a confidential discussion contact us by clicking here.

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