IEA (2017), The future is brightness as a service, IEA, Paris https://www.iea.org/commentaries/the-future-is-brightness-as-a-service
When astronaut Barry Wilmore needed to carry out repairs on the International Space Station in December 2014, he lacked a socket wrench needed for the job. Previously, this would have meant waiting months for the next supply rocket, or sending a specific flight at great cost. Not anymore. Back on Earth, engineers designed the specific tool on their computer, emailed the file back to the space station where it was manufactured on a 3-D printer and used successfully. This story probably holds a world record for the single-most impressive energy efficiency action: firing an email instead of a rocket to deliver a tool.
That same month, 13 people were held hostage in a café in a terrorist attack in Sydney. In the panic caused by the incident, people sought to get out of town quickly, and many turned to the ride-sharing app Uber. But the surge in demand caused a surge in prices, and the cost of a ride quadrupled. The affair quickly turned into a public relations disaster for the company, which was accused of cashing in on the attack. Within hours, Uber was offering refunds and apologized. Still, it was operating the most basic rule of economics: supply and demand balanced by price.
These two examples illustrate the common new features of the digitalization domain – the fantastic promise of new technologies intermingled with complex debates about their social consequences, acceptability and governance.
New digital technologies offer tremendous potential to improve the efficiency of energy supply and use in all sectors. They offer great opportunities for better control and optimisation, and reduced costs. For energy efficiency, digitalization may offer something even more fundamental, more akin to the leap to emailing wrenches into space. The space station story has specific relevance – additive manufacturing could have huge implications for energy use in industry. But more broadly, new digital technologies could unlock huge amounts of energy efficiency potential previously out of reach.
We now have control of energy use that we have never had before. Real time monitoring is enabling the closer interrogation of energy use patterns; artificial intelligence is being applied to this interrogation; and new levels of optimized and efficient control are being delivered. The analysis and control can be done anywhere – I recently visited a control centre in Dublin that was managing energy in real time in office towers in Dubai.
Thanks to new technologies, many of the classic barriers to energy efficiency around knowledge, confidence, certainty, measurement and verification are falling away. Performance can be measured in real time, energy use compared before and after upgrades, factors such as weather and behaviour can be observed and stripped out. Systems can also track and verify savings, thus unlocking new ways to finance and contractualize energy efficiency gains.
This allows the deployment of new energy services business models that were considered in the past but were very often too complex to deliver in practice. These include various forms of performance contracting and, more excitingly, business models that focus on energy services, not energy. The user demands services such as heating, lighting, mobility, and leaves the details, including ownership of the equipment, to the experts. I want light, not lights.
Digitalisation will allow us to manage all parts of the energy system better. For energy efficiency, though, it is not just doing things better, but potentially doing new things. But of course, whether this potential is realized depends on many factors. Trading energy efficiency as a commodity, offering new demand response services to grids, selling integrated energy service packages to businesses and householders – all will test markets and regulations created for something else, and of course will meet resistance from those they disrupt. It is not new that business and technology innovators force policy makers and regulators to catch up, but perhaps the pace of change we are now seeing makes this different.
A London-based company called Bboxx sells energy access in Africa to communities far from the electricity grid. It doesn’t think in terms of how much power to supply, but rather looks at the energy services required. It offers a package consisting of a television, a radio, phone chargers and lights, and has built a system to deliver that with a solar panel and battery. Super-high efficiency appliances are central to the solution, and a service business model is used – the user pays a fee for the services delivered, not the energy used. It is all rooted in digital technologies for monitoring and billing.
Think of these kinds of innovations - in the technologies, the business models and the ideas themselves - applied to every part of the energy system. The future is not just bright. It is brightness as a service.
A version of this article was previously published by the European Council for an Energy Efficient Economy.