Energy Internet: Building the Future of Energy

The Future of Energy: Beyond a Single Innovation

In my role as Vice President of Innovation at National Grid Partners, I lead the creation of programs designed to enhance National Grid’s existing operations and cultivate potential independent ventures.

Naturally, this position provides me with a considerable perspective on the evolving landscape of the energy sector.

However, predicting the future with certainty is impossible for anyone. A key aspect of managing our innovation investments is not attempting to identify the single, definitive winning technology.

Instead, the focus is on strategically distributing our resources across a diverse range of opportunities to maximize overall potential returns.

The Rise of an Open Energy Ecosystem

Current global and regional analyses demonstrate that the next significant advancement won't be a singular breakthrough. The future of energy hinges on open innovation and the seamless integration of components throughout the entire energy supply chain.

Only through the development of such an open energy ecosystem can we effectively respond to the fluctuating – and often unpredictable – dynamics of the energy market.

This adaptability is crucial for navigating the complexities and uncertainties inherent in the industry.

The "Energy Internet" Concept

I conceptualize this open, innovation-driven methodology as the “energy internet.”

I firmly believe this represents the most substantial opportunity currently available within the energy sector.

It’s a shift towards a more interconnected and responsive system, capable of leveraging diverse technologies and approaches.

Understanding the Energy Internet Through Analogy

The concept of an energy internet proves particularly insightful when considered alongside the evolution of the digital internet. Prior to the widespread adoption of the digital internet – encompassing all associated hardware, software, and standardized protocols – technological landscapes were fragmented into isolated systems.

These included mainframes, personal computers, databases, and proprietary networks. However, as the digital internet matured, these barriers dissolved.

Modern digital services can now leverage a diverse range of backend platforms, from legacy mainframes to standard server hardware and cloud-based virtual machines. This flexibility is key.

Digital information can be transmitted across networks connecting any customer, supplier, or partner globally, with customizable parameters for speed, security, capacity, and cost. The transmitted data can take the form of data, audio, or video.

Endpoints can range from traditional desktop browsers and smartphones to IoT sensors, security cameras, and point-of-sale systems. This interoperability fostered an open digital supply chain.

Consequently, an unprecedented surge in online innovation occurred, allowing entrepreneurs and inventors to concentrate on unique value propositions without needing to constantly rebuild the underlying infrastructure.

The energy sector must now pursue a similar trajectory. We should view diverse generation sources as analogous to server platforms.

Transmission grids need to be as readily accessible as data networks, and energy delivery should be as adaptable to various consumption points. Innovation at these endpoints must also be actively encouraged, mirroring the successes of the tech industry.

Just as the digital internet incentivizes innovation across its supply chain – whether through superior applications or innovative devices – the energy internet will unlock opportunities throughout the entire energy ecosystem.

This will foster a more dynamic and responsive energy landscape.

Key Parallels Between Digital and Energy Networks

• Both began with siloed systems.
• Both benefited from increased accessibility and interoperability.
• Both encourage innovation across the entire supply chain.
• Flexibility is paramount in both models.

Ultimately, the energy internet promises a future where energy is delivered and consumed with the same efficiency and adaptability as information in the digital world.

The Emerging 5D Energy Landscape

What constitutes the energy internet? Let's begin by establishing a framework that extends current discussions surrounding digitalization, decentralization, and decarbonization.

Digitalization: Progress hinges on comprehensive data concerning energy demand, supply levels, operational efficiency, prevailing trends, and significant events. This information must be precise, complete, current, and readily accessible. Initiatives like the Internet of Everything (IoE), open energy platforms, and the often-referenced “smart grid” are crucial, providing innovators with the necessary insights to continually refine energy delivery’s physical aspects, logistical processes, and economic viability.

Decentralization: The internet revolutionized global connectivity by shifting computational power from centralized data centers to distributed locations. The energy internet will mirror this transformation. Digitalization facilitates decentralization by enabling the integration of assets into an open energy supply network. However, decentralization extends beyond mere integration; it involves the widespread deployment of new assets wherever they are required.

Decarbonization: The pursuit of decarbonization is the central objective. A transition to environmentally friendly supply chains, built upon decentralized infrastructure, is essential. This infrastructure should utilize energy sources from all available locations to satisfy demand anywhere. Both market forces and regulatory mandates are driving this shift. Consequently, the energy internet represents not only an investment opportunity but a fundamental necessity.

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Democratization: A significant portion of the innovation spurred by the internet stemmed from its dual effect of physically decentralizing technology and democratizing access to it. Democratization, in this context, means empowering individuals with control over energy resources. Expanding the pool of contributors – both in terms of expertise and participation – will accelerate innovation and improve our responsiveness to evolving market conditions.

Diversity: As previously stated, predicting the future with certainty is impossible. Therefore, large-scale innovation investments should prioritize diversification. This isn’t solely about risk mitigation and maximizing returns; it’s a strategic enabler. If we believe the energy internet – or Grid 2.0 – requires seamless collaboration across the entire energy supply chain, we must diversify our innovation efforts accordingly to foster interoperability and integration.

The digital internet’s development followed a similar path. Standards organizations played a vital role, but their standards and implementations were propelled by industry leaders like Microsoft and Cisco, alongside prominent venture capitalists. These entities ensured the ecosystem’s success by prioritizing integration throughout the supply chain.

We must adopt the same approach for the energy internet. Those with the capacity to influence should actively promote integration across the entire energy supply chain, even while enhancing individual components. To this end, National Grid initiated the NextGrid Alliance last year, bringing together senior executives from over 60 utilities worldwide.

Furthermore, fostering diverse perspectives within the energy sector is crucial. National Grid has highlighted the significant underrepresentation of women in the energy industry and in STEM programs. Deloitte’s research indicates that diverse teams are 20% more innovative. Over 60% of my team at NGP are women, and this varied perspective has been instrumental in National Grid’s innovation initiatives.

A Shift Towards Actionable Energy Solutions

The energy internet is transitioning from a theoretical concept to a tangible reality, with concrete examples already demonstrating its potential to reshape the energy landscape.

Transnational Green Energy: The energy internet is evolving into a globally interconnected system, mirroring the reach of the digital internet. Currently, the United Kingdom imports wind power from countries like Norway and Denmark. This cross-border utilization of distributed energy resources will yield substantial economic advantages and foster new possibilities for energy trading.

Innovative Electric Vehicle Charging: The process of electrifying vehicles differs significantly from refueling with gasoline, and charging infrastructure should reflect this distinction. Advancements in smart metering technology, coupled with rapid charging station designs, will unlock new revenue streams at locations such as workplaces, apartment buildings, and other convenient areas.

Enhanced Resilience During Crises: The recent challenges experienced in Texas underscored the vulnerabilities of energy systems lacking internet-like connectivity. Prudent utility companies and governmental bodies must prioritize digitization and interoperability to improve infrastructure diagnostics and enhance community protection.

These instances represent only a fraction of the potential benefits offered by an open and universally accessible energy internet. Such a system will encourage innovation, intensify competition, and deliver significant positive outcomes. While the precise nature of these gains remains uncertain, their widespread benefits are assured.

Therefore, a proactive commitment to digitalization, decentralization, decarbonization, democratization, and diversification is essential, even in the absence of definitive foresight. By collectively pursuing these goals, we can construct the energy internet and secure a future characterized by equitable, affordable, and sustainable energy access.