Over the last few years, the energy sector has seen seismic change in the way that it operates. With increased energy demand, rising costs to deliver energy, challenges on consumer pricing, political pressures, and strict regulations all underway, the industry is at a crucial turning point.
But in order to be successful, we must embrace change.
When it comes to the future of energy, there are four topics leading the conversation within the sector…
The soaring cost of energy
A hot talking point of late is the steady increase in the price of energy. It has, of course been evident in the media the impact this is having on the end-user, but what is less talked about is the strain also being felt by the energy industry.
Over the last 12 months alone, over 30 energy companies have collapsed due to the increased cost of service. This has come about following a worldwide squeeze on energy supplies and a rise is wholesale pricing of over 300% since the beginning of last year. These actions, alongside a price cap implemented from Ofgem, has led to firms offering energy services at rates lower than their wholesale buy price.
If energy doors are to remain open, they must look at new ways to buy and sell energy services to the market.
The rapid growth of renewables
While those providing traditional energy services feel the pinch, those in the renewable sector are continuing to thrive following another record year of growth. In fact, it’s been stated that renewables will account for 95% of growth in global power-generation capacity over the next few years, exceeding that of fossil fuels and nuclear energy.
This growth is in part thanks to a range of new climate and energy policies being implemented worldwide in order to help us meet our green credentials. Something that was a huge talking point at last year’s COP 26 summit.
Regardless, renewable energy clearly has a key part to play in the future of UK energy with wind and solar energy a crucial incumbent in our move to become truly net-zero.
The rise of the Internet of Energy
The latest buzzword across the industry is the Internet of Energy (IoE). The service involves merging Internet of Things (IoT) technology into the national grid to optimise energy usage and reduce wastage.
This technology allows energy providers to better balance energy demand while also allowing consumers to reduce costs by running appliances at a time where the cost per wattage is at its lowest.
For example, should a household wish to run their dishwasher at a time where it will cost the least, IoE technology should identify off-peak times from the grid, and turn on the dishwasher at the most appropriate time.
By combining the internet and solar energy in this way, the benefits could be great. So much so that, UK based utility company National Grid have stated that between 30% – 50% of fluctuations in the grid could be solved if both households and businesses adjusted their demands at peak time.
The move to demand-based models
Much like it’s ‘as a service’ counterparts, Energy as a Service (EaaS) allows the end-user to consume energy using a service-led business model. This means they broaden their offering from ‘just energy services’ to also include technology, analytics and reporting and even access to the grid. By taking energy in this way, the consumer will gain better visibility over their usage and expenditure, taking individual services in exchange for a recurring fee.
Historically, energy has been sold in kilowatts per hour but more recently it’s come to light that there is an appetite to simplify energy requirements, to ensure better sustainability and more cost-efficiencies. This realisation led to some energy providers looking at how they could better manage their overheads through the introduction of demand-based energy options.
EaaS proves beneficial both to the energy companies providing the service and the consumer thanks to its user-centric model which enables both to leverage cost savings while allowing the provider to diversify their product offering.
The part connectivity can play
One thing is clear, to truly succeed in such a fast-changing market, energy providers must not only be flexible enough to adapt to this changing world, they must also have robust, underlying networks in place to support their future ambitions. Embracing the aforementioned new technologies and initiatives is a sure-fire way to elevate the energy sector into the future.
To ensure success however, they must consider partnering with a network provider who not only understands their business, but can also work with them to overcome their connectivity challenges.
That’s where we come in. With over 20 years of industry expertise, Neos Networks has been supporting the energy sector to meet their connectivity ambitions thanks to our critical national infrastructure and expansive knowledge of the sector and the challenges and opportunities set to come its way.
We’re proud to own and operate a pervasive UK business-only network spanning 34,000km fibre network, 550 unbundled exchanges, 676 points of presence and 90 on-net data centres. On this we provide robust, reliable connectivity options to suit the energy market, all with capacities up to 100Gbps.
Regardless of who you partner with, finding a provider with a range of core connectivity options that can support EaaS, IoE, the changes in the way customers consume energy and more is imperative.
Once found, a world of opportunity will be opened, allowing those in the sector to achieve a more fruitful and energy-efficient future.
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