[Scenario] Welcome to Energytown, the public utility of tomorrow
While others in Germany are still busy discussing the country’s transition to a new energy economy, a forward-thinking public utility company, Energytown, is breaking new ground. It’s now a matter of sustainably harnessing the ability to generate added value. For its current and future investment projects, Energytown’s public utility is building on new business models.
One priority is to maximize the community’s ability to generate its own energy, particularly from renewable sources. The plan is for residents of the new neighborhood in Energytown to provide their own energy as far as possible – and save money in the process.
Construction phase 1 – new housing complex
On a former factory site in Energytown, German Rowhouses Inc. is building 180 townhouses. Every single-family home in this new housing development will be equipped with solar panels on the roof, as well as an inverter and storage unit. For its part, the Energytown public utility is furnishing each new house with smart metering systems that will give a precise picture of how much is being generated and consumed. This data is produced by smart meters, collected by meter gateways, and then processed, encrypted, and sent to metering point operators. It’s not necessary to expand the existing supply grid for the new development; the public utility is thrilled to see that the funds budgeted for this can instead be invested in technologies of the future.
Existing housing developments and industrial areas
In existing housing developments and industrial areas, many of the power generation and consumption facilities will have to exchange their receivers, which up to now have been controlled by audio-frequency ripple control. Energy providers want to use this opportunity to invest directly in fail-safe technology that is inexpensive, tamper-proof, and therefore sustainable. They will roll out new receivers with integrated radio modules, which will allow smart control of facilities using radio-based ripple control. This is not just an issue of profitability (significantly lower purchase, operating, and maintenance costs as well as space freed up by compact systems), but also of grid stability. Based on service level agreements, it will soon be possible to reduce or increase how much any individual or grouped facility produces or consumes, and do so on demand and with time delay. Taking into account information from weather forecasts and what happens at what time of day can help find the right switching times.
Software-supported planning, control, optimization, and monitoring of the entire process will ensure a cost-effective roll-out of the new receivers.
Construction phase 2 – new industrial area
The next construction phase will see a mixed residential and industrial area emerge. The public utility will equip the whole housing development with two CHP plants plus peak load boilers, a thermal storage unit, and an efficient energy storage system, all of which is intended to supply the industrial area with power as autonomously as possible. Here’s how it works: the efficient CHP plant takes care of the base load. Inside, a combustion engine powered by natural gas pairs with a generator to produce electricity. The waste heat from the combustion inside the engine is also converted to electricity, thereby achieving a higher degree of efficiency. This is why the community is investing in an ORC system.
Construction phase 3 – solar and wind farm/incorporating renewables
Outside of the community is a solar and wind farm. The operator feeds the electricity it produces into the grid. Because of the volatility of renewable energy sources, public utilities are increasingly running into problems as they attempt to maintain the stability of the distribution grid. To solve this, they are investing in a storage system that overcomes the major obstacles of decentralized energy production. The process is straightforward: together, the heat-led CHP plant and the solar plant of the residential neighborhood generate electricity, but not just when it’s needed. Then the megawatt battery takes up and stores the excess power and makes it available on demand. In this way, the community increasingly supplies itself with electricity, and is becoming more flexible and independent.
To manage the decentralized generation plants in such a way that the grid remains stable and the plants all operate at an optimum level, the public utility sets up a virtual power plant (VPP). The VPP evaluates all grid quality data gathered by the smart meters and smart meter gateways, using it to forecast power supply and demand to within a 15-minute window. Based on those forecasts, it optimizes the load profiles of the numerous decentralized power plants so that the distribution grid remains stable. This reduces the costs of grid expansion, since the existing distribution grid can be used more efficiently.
Energy efficiency starts at the utility itself
Utility companies want to be energy efficient as well. The way to do this is with energy management software that collects all the relevant performance and energy-consumption data from individual buildings or a whole location to produce an overall picture of consumption. By putting together reliable data, it makes it possible to derive actions to raise energy efficiency and measure their progress.
What new business models does the utility intend to pursue with an eye towards sustainably creating value?
Leasing model: As part of a potential leasing model, homeowners allow the utility to install solar panels on their roofs and in return, the utility supplies them with green electricity at a price guaranteed over the long term. Benefit for the utility: customer loyalty.
Demand response program: The industrial area is also home to frozen foods manufacturer cool & fresh ltd. It formally agrees to let the utility integrate its cooling building into the utility’s pool of distributed facilities. Benefit for the utility: additional flexibility to stabilize the grid whenever required.
Direct marketing according to German regulation for Renewable Energy (EEG): Utilities plan to actively engage in energy trading, so they sign an agreement with the operator of the wind and solar park in which they offer to market the energy the park produces. They set up a VPP to optimize the income from the sales. Benefit for the utility: increased revenue.
Provision model: A utility provides end users with products such as a condensing boiler (mini CHP, etc.) or an energy storage system, plus service and maintenance. End users sign a contract with the utility to supply their gas and electricity and agree that the devices in their basements are controlled by the utility. Benefit for the utility: customer loyalty.
On the way to self-sufficiency
Thanks to these measures, the Energytown utility company is offering a variety of benefits that enable the community to get a taste of an energy-efficient future. The community and the utility are working closely together to realize further projects and to expand existing business areas. What’s more, Energytown is ready for the micro-grid– which means it could become independent from external energy producers.
Innovative utilities: stay tuned
Next time, I’ll be discussing the experiences of various public utilities that have already broken new ground.