• Uttam Mishra

How to save the planet and generate revenue doing so.



Climate change is one of the existential threats facing humanity. As a result, most governments and enterprises have pledged commitments for net zero emissions over next 20-30 years. Fulfilling these commitments, however, entails significant changes from governments, corporate organisations and individuals.


On individual front, we need to make lifestyle and behavioural changes. Governments across the globe need to plan and enable the necessary infrastructure for the transition to net zero carbon emissions. However the biggest responsibilities are with the corporate organisations to facilitate the necessary changes in order to achieve net zero commitments.

A major proportion of current emissions are produced due to the demand of energy and transportation sector. The latest global greenhouse gas emissions report by OurWorldInData.org, based on usage data from 2016, indicates that over 73% of global emissions are associated with energy consumption and production.

Following the recent advancements and the significant cultural shift towards electric vehicles, it is likely that energy and transportation will soon combine into a single category.

When looking at all the major mitigation scenarios currently in study, three key themes arise:

  1. Decarbonizing power generation

  2. Substituting the direct use of fossil fuels for buildings and transportation for electricity

  3. Reducing aggregate energy demand through technology and other substitutions

Technology plays a significant role in any future carbon emissions strategy, however, in our view, technology will be a major enabler, in particular, for points 1 and 2 above.

With legally binding commitments by most advance economies for net carbon zero, most governments and academics are actively focused on finding practical solutions and alternatives to status quo. At present, all energy demand strategy solutions in the short to medium term are focused primarily on:

  1. Micro-generation

  2. Energy storage technologies

  3. Smart devices that can automatically control themselves as part of a future smart grid

Technologies required to support all of the above are currently present and commercially feasible. When considered in isolation, however, each of these strategies present both solutions and significant problems.

Micro-generation strategies using alternative sources like solar and wind are greatly beneficial for the environment, but they carry inherent problem of reliability, making grid management a difficult process when energy usage fluctuates. We all saw the impacts of these demand fluctuations at the beginning of the first lockdown in March 2020 (as reported by the BBC):

"You're doing a service to the National Grid," says Greg Jackson from Octopus Energy, the company who encouraged their customers to use more during negative pricing episodes.

"The grid is going to pay someone to deal with this problem of oversupply. They will pay a company to build batteries, or they will pay companies to stop generating or you can pay customers to use electricity at those times."

"These are all different ways of providing the service of balancing the grid."

On that April Tuesday, Octopus Energy customers were getting around 4p per unit of electricity they used. Not a fortune, but perhaps a sign of things to come.

Negative prices were once a rarity, but they plunged into the negative 66 times just in April 2020 in the UK. The transition to a greener future means that grids will face huge influxes of power from intermittent suppliers, while demand will probably fall. Flexible pricing will likely remain a feature.


Such incentives of flexible and negative pricing are a sign of things to come and they are equally applicable both when the demand reduces as well as when the demand surges. A smart micro-generation unit doesn’t just provide energy when needed, it can also respond to the grid fluctuation events to prevent failures and maximise revenue, the key is timely responses and smart decisions. A few common strategies include:

  • On the demand side, you could increase usage (Turning on hot water, battery storage or charging electrical equipment etc) whereas with a surge you could be reducing usage of air conditioning etc.

  • On the generation side, you could also increase or decrease (think of wind energy) generation capacity and generate more revenue by helping the grid stabilise

Bringing smart storage technologies into the mix, further increases the possible opportunities. In reaction to the same grid events, instead of reducing the generation, the surplus energy could be diverted to smart storage devices. This not only helps the grid to stabilise, but also creates capacity for future use. The ability to store excess energy for future use will have many practical applications, including charging automated cars in case of oversupply.


Key challenges

Specialised systems and procedures are utilised to keep the grid working, the speed and accuracy of these systems is a crucial factor. Even with a centralised grid, these strategies are often complex and require a combination of human and technological systems to operate and manage the grids.

However, when we start thinking about distributed micro-generation, future grids are required to be perhaps smarter and more distributed in nature.

It is difficult for humans to react to various surge or dip events in a distributed grid and make the decisions required for these smart grids, smart generation and storage devices. Automated and smart decision making is required at a local level to optimise overall efficiency and make these different technologies work together as one coherent unit.


Solution

This may all sound too complex or futuristic, but this is not just feasible, many organisations are already utilising these strategies both as part of their net zero carbon commitments and as a tool for EaaR (energy as a revenue). The primary enablers for such solutions are:

  • IoT

  • Edge computing

  • Cloud computing

  • Smart integrated devices

  • Effective DRM (demand response management) using AI and machine learning

Given the advances in technology, specifically around AI and machine learning, this type of decision-making is very much possible and is already actively used in such solutions.


Conclusion

AI based autonomous decision making which is influenced and trained by humans with a human in the loop design is actively in use across many products and solutions.

Today, organisations across the globe are starting to utilise advancements in technology like IoT, Cloud computing, AI and Machine Learning along with government incentives to formalise their EaaR strategy, generate significant revenue and make a positive contribute towards net zero.


Next Steps

Wondering where to start with such a strategy or how this might be of use to your organisation? Schedule a call with one of our consultants to discuss how such a strategy could help your business meet its net zero carbon commitments and generate additional revenue.

Want to know more about possible AI use-cases for you business?, request a case study here.