As wind and solar generation comes to represent an increasing proportion of our power generation mix, our electricity supply-base is increasingly intermittent and inflexible. Since electrical supply and demand have to be matched on a continuous basis, we need more demand-side flexibility.
Unlike traditional centralised coal plants, renewable assets are often connected to the local grid. This presents an opportunity to increase grid efficiency and reduce transmission losses. It also introduces new challenges such as two-way power flows, a need for greater visibility and integration of decentralised assets and introduces the potential for new, locational pricing models.
Rapid developments in smart grid technologies, artificial intelligence (AI), home energy management system (HEMS), Internet of Things (IoT) and other connected devices offer greater visibility and control than ever before. It also creates new requirements for co-ordination, interpretation and data security.
Increasing desire for a more active role in the energy market has lead to the rise of "prosumers" who seek to generate their own electricity from personal or shared community assets, and/or purchase energy directly through peer-to-peer (P2P) transactions. Production is becoming more ‘democratic’ with more parties participating in the energy value proposition.