I’ve recently returned from the World Smart Energy Week (WSEW) in Tokyo. With over 70,000 attendees and 1,500 exhibitors, WSEW is the largest smart grid and renewables event in the world, and a great place to discover what the industry thinks the future holds.
Throughout the week, several key themes emerged. As renewables gain ground in power systems, the task of integrating by balancing demand and load in real-time is becoming both more critical and more complex. Leveraging the vast amounts of energy data our grids now generate can help improve efficiency and reliability, but only if we can cut through the noise. And most of all, to successfully pull of these shifts requires ever-greater alignment between industry players and a true push for collaborative solutions.
It was fitting that Japan hosted WSEW, since the country is leading the shift to a next generation grid. As an island with few hydrocarbon resources and the desire to diversify beyond nuclear, Japan is planning for massive integration of renewables into its system. A challenge given the inherent variability of renewable energy generation. To overcome this obstacle, Japan plans to ramp up ‘negawatt’ trading: paying energy consumers to vary their consumption up or down in lockstep with what those renewable sources are producing to balance demand and load in real-time.
This type of ‘demand-side management’ (DSM) is the product that Ontario’s ENBALA Power Networks offers to large energy consumers. The Japanese are looking to introduce DSM at an even more granular, household, level. To do this requires massive flow of energy data and self-learning algorithms to balance comfort with cost-savings. In his keynote address, Masaaki Nomoto, manager of Hitachi’s Energy Solutions Division, predicted a 100-fold increase in the amount of energy data we will generate and store over the next 10 years. Given the effort that has gone into Ontario’s Green Button Program, it is heartening to hear how valuable and important it is to unlock the potential of data for energy management.
Interestingly, Mr. Nomoto was quick to note that data is not enough to balance comfort and reliability with cost-savings. Social innovation is just as critical as technical prowess. Richard Schomberg, (VP of Smart Energy at EDF and Smart Grid Chairman at the IEC) echoed this sentiment, stating that Japan’s move towards end-to-end energy system integration demands strong, clear, consistent standards to structure the interactions between utilities and consumers. Strong standards are the key to avoiding pitfalls of increasing complexity. Schomberg spoke of standards as the “chromosomes” of a smart grid, the basic packages of order that make meaning out of what would otherwise be a jumbled mess.
The biggest takeaway from the week is that Japan’s successful smart grid transition increasingly requires alignment between an electricity market’s standards, regulatory structures and its broader social goals. Many speakers referenced a Cisco white paper, which analyzes the types of value that smart grid investments create. It finds that smart grid investments have the potential to transform markets and create savings for consumers. In the process, these investments change the balance between incumbents and emerging market participants as new types of value—and new business opportunities—are created.
This is where systems change—a structured process for including multiple stakeholders in policy, program and resource decisions—is a key approach to reaching alignment between diverse players. We know that the value of a distributed community grows as the square of the number of nodes, but communities will only benefit if they have agreed on how to capture that value for the good of the whole. Japan’s lessons on the need for a systems change approach were heartening. The message is simple: Ontario—and Canada—can go a long way to addressing pressing energy challenges if we go there together.