The Internet of Electricity

‘Enernet’: Using the lessons of the internet in energy

In 1995, just 1% of the global population had access to the Internet. Last year, this increased to 40%. Whilst this is by no means a majority, it demonstrates how quickly adoption occurs when new players develop disruptive competition and new consumer products. This is exactly what is happening in the energy industry today. Forward-looking companies are moving away from fossil fuels and legacy infrastructures, accelerating the adoption of renewable power and the consumer products to go with it. Enter: the Enernet. The Enernet is, simply put, the Internet of Electricity. It’s a multi-participant energy network based on the creation, storage and delivery of clean power. The ultimate goal of the Enernet is to create Smart Cities, with Internet of Things connectivity, networks, Electric Vehicle (EV) charging, and more. The Enernet has been hailed as the solution to energy issues. . . but do we really need it, and how disruptive will it be?

The Enernet – Who and How
Do we need the Enernet? In short, yes, because traditional energy providers are plagued by logistical problems. Most of our personal devices run on DC (direct current) power, but the grid creates AC (alternating current). This means that the grid has to convert AC to DC, resulting in energy loss. On top of this, the grid has become less reliable, leading to blackouts and powercuts. Considering that the demand for energy is predicted to rise as much as 81% by 2035, something has to change. Ethernet creator Bob Metcalfe was the first to suggest using the Internet to address energy problems back in 2009. It’s taken a while, but a new gang of energy providers like SunRun have been quietly working on smart equipment, services and software for an energy-connected world.

The obvious disruptor in this new sphere is Elon Musk and his affordable, consumer-targeted solutions including solar roof tiles, batteries and home systems. In partnership with Tesla, SolarCity is ready to become an Enernet giant. However, the Enernet was on the cards long before SolarCity began to make telcos sweat. Over 10 years ago, solar company SunEdison kick-started the move towards the Internet of Electricity. Now, a host of innovators are building microgrids, distributed energy resources and virtual power plants. All of this will accumulate in new networks driven by cost efficiency and improved service.

How disruptive is the Enernet?
The Enernet presents a huge economic opportunity for pretty much everyone. First of all, the adoption of renewable power will encourage sustainability. It will also improve supply and demand through real-time data analysis and storage solutions. Less waste means less cost for both providers and customers. According to Bob Metcalfe, the Enernet will do for power what the Internet did for data, making it a ubiquitous and accessible service. Disruptive providers will be able to use in-depth energy analytics to understand consumer needs, which will lead to an improved, robust service that uses data to create efficiency. This won’t kill legacy utilities – in fact, it’s important to get them on board. The adoption of clean power can’t happen without the support of major providers, and companies that engage with the Enernet will continue to sit at the top of their industry. Obviously fossil fuel providers will have a difficult time ahead of them, but that’s to be expected when you base an entire business model on finite resources. Even new, innovative energy companies could find it difficult to crack the market, as Internet giants like Google already have their own power source and are currently the only ones able to run global operations. Musk’s satellite project could change this, but younger companies simply don’t have the money to pose a real challenge – yet.

If the lessons learnt by the Internet can be applied to energy, then the Enernet could provide an answer to the current problems faced by utilities. Generation, storage and delivery would no longer rely on out-dated legacy firms, and would become clean, efficient and connected. This is a huge opportunity for businesses, startups and early investors. Yes, it will be hard for new companies to get their foot in the door, and it won’t come cheap. However, investment now means returns later, just as it did with the Internet. . . that is, of course, if everything goes to plan. Looking forward, the Enernet is the vital step towards super-connectivity, which, like the Internet, will disrupt every aspect of society.

Will the Enernet revolutionise energy? Is there really a place for legacy companies in future power generation and supply? How long will it be before we see the first truly Smart City? Share your thoughts and opinions.