How to develop distributed energy under the ubiquitous Internet of Things

Overview of Distributed Energy Development

Distributed energy is a way of developing and utilizing energy that is deployed on the user side. It has the characteristics of local utilization, clean and low-carbon, diversified interaction, flexibility and efficiency, and is an indispensable and important part of the modern energy system. Internationally, developed countries such as Germany, the United States, and Japan have vigorously developed distributed energy and promoted energy transformation. Navigant Research, a US market research organization, predicts that the growth rate of global distributed power sources will be 9 times that of centralized power stations in the next 10 years, and by 2030, half of the world's electricity supply will be provided by distributed power generation.

my country is also vigorously promoting the development of distributed energy. In December 2016, the National Development and Reform Commission issued the "Energy Production and Consumption Revolution Strategy (2016-2030)", which proposed "adhering to the development of both centralized and distributed energy, focusing on distributed utilization, and promoting the high-proportion development of renewable energy". At present, the development of distributed energy in my country has the following characteristics:

First, distributed energy has shifted from the start-up stage to the rapid development stage, and the development model has also transitioned from a single model to a comprehensive model. Strictly speaking, my country's distributed energy began to develop after 2000, with trigeneration of cooling, heating and electricity as the main form of utilization, but due to factors such as insufficient natural gas supply and high prices, the early development was slow. In recent years, driven by relevant national policies and plans, distributed energy has continued to accelerate. Since 2015, the state has approved 23 multi-energy complementary integrated optimization demonstration projects, 28 new energy microgrid demonstration projects, 55 "Internet +" smart energy and other series of pilot projects, a total of 108 pilot demonstration projects, and integration has become a new feature of distributed energy development.

Second, distributed energy is deeply integrated with market-oriented reforms and mutually reinforcing, and has become an important breakthrough for some stakeholders to enter the field of power distribution and sales. In October 2017, the National Energy Administration issued the "Notice on the Pilot of Distributed Power Generation Market-oriented Trading". In March 2018, the National Development and Reform Commission issued the "Implementation Measures for the Division of Distribution Areas for Incremental Distribution Business (Trial)" and the "Notice on Further Promoting the Reform of Incremental Distribution Business (Draft for Comments)". With the continuous advancement of power system reform, investors in incremental distribution reform can form a regional integrated distribution and sales model by building distributed power sources. Although distributed energy currently accounts for a small proportion of energy production, it has become an important breakthrough for some stakeholders to enter the field of power distribution and sales.

Third, a number of integrated energy service companies have emerged around the development of distributed energy systems, with rich and diverse business models. Traditional distributed energy systems generally integrate various existing distributed energy supply systems. Each component is independent of each other and is independently planned, constructed, operated and managed by different units and departments, involving power companies, heating companies, gas companies, etc. Due to the lack of unified coordination, it is difficult to achieve overall optimized operation and management. With the rapid development of distributed energy systems, a large number of integrated energy service companies have emerged in the market, with a wide range of business coverage. In terms of energy production, it includes the design, installation and operation of various distributed energy sources; in terms of energy supply networks, it includes the design, installation and operation of various networks such as electricity, gas and heat; in terms of system interconnection, it includes interconnection and integration with upstream networks and downstream users; in terms of operation and management, it is based on big data and other advanced technologies to unify the operation and management of various energy sources.

Fourth, distributed energy will play a more important role in my country's energy production in the future, effectively improving resource utilization efficiency and alleviating environmental and climate problems. In recent years, China's distributed power sources, especially distributed photovoltaics, have developed rapidly. In 2018, the ratio of distributed photovoltaics to centralized photovoltaic power stations in China's newly installed capacity was about 1:1.2. It is predicted that the scale of development of distributed power sources in my country will be about 160-190 million kW·h and 350-570 million kW·h in 2020 and 2030, accounting for 7.7%-9.3% and 11.5%-19.1% of the national power installed capacity. Distributed power sources will be a beneficial supplement to large units and large power grids.

The impact of widespread access to distributed energy on the market

The widespread access to distributed energy requires that the one-way vertical architecture of the power system gradually transform into a ubiquitous power Internet of Things that is distributed, clean, interconnected, digital, and mobile; both the business model and technical support of the energy market will undergo major changes.

From the perspective of market development, the distribution link is becoming a new highland of value, and it is expected that the market share will account for 2/3 of the entire industry chain in 2030. A large number of distributed energy sources are connected to the distribution network, such as distributed power sources and user-side energy storage, which share part of the power load of centralized power sources. At the same time, the investment in the distribution network also needs to be increased simultaneously. In addition, with the development of digital technology and the diversification of customer needs, a large number of client energy and non-energy products and services have emerged, and the client market has been greatly expanded.

From the perspective of customer demand, customer demand has shifted from safe and cheap electricity supply to green, flexible, personalized and sustainable integrated energy services. The integrated energy service market has great potential. When choosing an electricity supplier, users not only consider power supply safety and price, but also pay more attention to the green, convenient and interactive experience of energy products, which amplifies the service attributes. The market value of the energy and power industry is no longer just the income from the sale of energy products, but also includes the realization of energy services attached to the sale of energy products.

From the perspective of market competition, a large number of new market players have entered the market, the energy market has become more open, and the roles of the players have become more diverse. After a large number of small distributed energy sources have been connected, many new players have been introduced, such as distributed power owners (investors), distributed energy operators, integrated energy service providers, aggregators, hardware enablers, platform service providers, etc. At the same time, the roles of the players have become more diverse. For example, after the "wall-to-wall electricity sales" were allowed, the prosumers have evolved into prosumers, the single service provider is transforming into integrated energy services, and the technical service provider is transforming into an aggregator.

From the perspective of business operations, the business field will show a vertical extension of upstream and downstream, and a horizontal multi-energy-multi-service situation. Driven by the power reform, distributed power owners have the opportunity to become integrated sales companies or integrated distribution and sales companies. The distributed power operation mode can adopt a variety of operation modes such as full access to the grid, self-generation and self-use, surplus power access to the grid, market-based transactions, microgrids and incremental distribution, and virtual power plant market transactions. In addition, under the current low-carbon and green energy transformation situation, packaging cold, heat, and electricity to customers in a unified manner and providing diversified value-added services on this basis have become the transformation and upgrading direction of many energy companies.

From the perspective of technical support, digitalization has become an important support for the supply of energy services. The interconnection between distributed energy sources, the interaction between distributed energy sources and the power grid, and the resource sharing of market players all require the support of digital technology. Digitalization carries data flows and is an important source of value creation. In addition, blockchain, artificial intelligence, edge computing, etc. are also important supporting technologies.

After the widespread access of distributed energy

Energy Market Business Outlook

The business models of enterprises in the energy market are mostly one or more of the four basic roles of asset investment operators, service providers, technology innovators, and platform providers. Platform providers have more profit channels and are more profitable than single product or service providers.