By: Ashok John, Carsten Petersdorff
Artificial Intelligence technology for backgrounds
The energy industry evolution provides opportunities for businesses to engage in a highly digitized and integrated environment and gain revenue from new value streams and business models. This major transition—driven by decarbonization of the supply and demand sectors—to a clean, intelligent, mobile, and distributed energy system comes with a host of challenges but also opportunities. Due to the fluctuating and intermittent nature of renewable energy, distributed energy resources require additional flexibility potential on the demand side (e.g., buildings, industries, and mobility) to enable a robust and reliable supply system. The digitization and electrification of these components is essential to integrate various flexibility sources into the supply sector.
According to Guidehouse, cross-sectoral energy platforms such as Building-to-Grid (B2G) are enabling technologies that create value for intelligent and energy efficient buildings by integrating their storage and flexibility potential into the grid. A critical dimension for early movers and digital champions in this field is the velocity of the digital transformation, which has increased during the coronavirus outbreak. As Microsoft’s
This article addresses several key questions related to the journey toward an intelligent, highly digitized building segment. The answers provide an overview of immediate priorities to realize the full potential of this one-time opportunity.
How will the value chain change due to the rapid transformation of buildings into flexible value-creating resources?
The shift to B2G requires all energy industry stakeholders to be engaged—customers, energy providers, manufacturer and technology providers, and service providers. B2G as multisided platforms or digital marketplaces allow actors to provide value-creating resources and, because of the connected environment, create new services based on the bundled offerings of various players in the ecosystem. In this multi-directional setup, the role of customers will significantly change because of the provided resources, which are key enabler for the success of B2G. Offered resources on this platform include the following:
- Flexibility potential of physical assets such as buildings, HVAC systems, EV charging points
- Intangible products including: data streams around physical assets—e.g., operational time, lifetime, maintenance status, energy performance of a building or technical building systems and behavioral elements—e.g., occupant’s comfort temperature, ventilation habits, number of occupants, presence
These resources provide key insights into customer needs related to behavior, interest, and asset management and allow energy, service, and technology providers to create tailored services for customers.
How can existing solutions and stakeholders gain value from a B2G platform?
Energy providers can offer optimized economics to their clients because of the flexibility potential of customers’ aggregated physical assets as well as the relevant data streams and behavioral elements. For example, the increasing electrification of heating from heat pumps combined with highly efficient buildings creates large energy loads with significant thermal storage potential; this storage potential can be used for demand response management, such as peak shaving and real-time response to localized grid congestion.
Other resources relevant for demand response programs include HVAC systems, PV, and battery storage. Additional flexibility can be added by Vehicle-to-Grid (V2G), which is enabled by the EV revolution. B2G will play a pivotal role in activating V2G because the majority of charging infrastructure will be connected directly to buildings. A B2G ecosystem will simultaneously boost the flexible energy loads of EVs and buildings equipped with electric technical building systems.
Connectivity of technical building systems is an essential component of a B2G platform. This new functionality for technology providers and manufacturers creates unique opportunities for new services around their products. Examples of these new services include:
- Predictive operations and maintenance based on digital twins of the system such as HVAC, battery storage, EV charging points.
- Self-optimization of operations based on AI considering customer behavior and the energy performance of the building.
Further areas for engagement include solutions aimed at aggregating technical building systems and services to optimize the economics, carbon footprint (due to better energy performance), behavior, comforts, security, or health based on the interlinkage of intelligent building components—e.g., switching the air conditioning or heating system when windows are open or increasing air exchange when a high number of occupants or bad air conditions are detected. In the B2G ecosystem, these services can be provided by existing technology providers and manufacturers or service providers focusing on new business models and offerings based on data insights.
Profound changes will evolve in a B2G economy, increasing the opportunities for magnified revenue potential for involved stakeholders. Opportunities will be created through bundled services from strategic partnerships of relevant stakeholders, organic growth, or acquisitions. A B2G ecosystem results in an environment where the stereotypes of energy, technology, and service providers as we know them today no longer exist and expertise beyond core businesses is required.
Which market strategy enables technology and service providers to engage in this dynamic environment and win customers? What are the immediate priorities to realize the full potential of this one-time opportunity?
The media and manufacturing industries have shown that pursuing disruptive strategies is crucial to staying at the top of an industry. Companies that act fast and are decisive will benefit from the first-mover advantage in the dynamic environment of digitalization due to network effects. B2G platforms that can gather a crucial number of customers will increase the value for all stakeholders, resulting in exponential growth. Stakeholders that decide to engage in this ecosystem early will be rewarded by new and evolving business models and value streams based on insights such as customer needs and behavior and the flexibility potential provided by buildings.
