Energy democracy, or the democratization of energy, entails increased public participation in the renewable energy transition and the broader functions of the energy sector. The energy crisis and skyrocketing energy prices last year made end users more aware than ever before of their energy consumption and the impact they can have on overall energy demand. For the first time, people really started thinking about where their energy comes from, how they use it and how it affects not only their wallets but also the environment.
Why is energy democracy important?
Consumers have always had the ability to switch off lights or devices when they’re not in use. But electrification, digitalization and decentralization are allowing users to go much deeper than this. Now, the power lies in the hands of prosumers (consumers that also produce their own energy) – all they need is the right digital solutions that reduce complexity and put control in their hands.
Increasing distributed solar and encouraging users to produce their own electricity is a key pillar of the energy transition and achieving net zero. According to the IEA, by 2030, around 100 million households will rely on rooftop solar by 2030, up from 25 million today. It is estimated that installed PV capacity at the end of 2021 saved over one gigatonne (Gt) of CO2 emissions globally.
To decarbonize electricity, PV must be installed at scale, also on households. Decentralized solar can also reduce the need to transmit electricity across long distances and household solar can be monetized by feeding it into the grid – sharing it with neighbors or selling it on the market.
This means that empowering end users not only helps them to reduce their own costs, but also to increase the flexibility of supply and demand, and drive the share of renewables in the overall electricity mix. To achieve this, however, solar must be connected and smart.
The role of smart energy management
The good news: The number of people using smart home applications to manage energy nearly doubled between 2018 and 2020. The Home Energy Management Systems market is expected to grow at a cumulative rate of 12.5% between 2023 and 2025.
So, there is no doubt that smart home energy management is on the rise. It is clear that end users want to take control of their energy management to better understand how they use electricity, actively control their consumption and produce their own energy. But we are still just at the beginning. True energy democracy involves reaching all households and users. How can we bring it to the mass market?
As with any market, the key to encouraging end users to adopt solutions is removing complexity. Modern users demand integrated solutions, which do not require dealing with different companies. They want transparency, understanding and control from a single (ideally digital) source. In addition, by exposing customers to price volatility through dynamic prices, energy companies can create incentives for users to shift consumptions to times of excess renewable supply.
There’s an app for that
As of 2016, the average customer spent 8 minutes per year interacting online with their utility. This number can simply not stay like this - for citizens’ sake wanting to minimize their bills, for utilities’ sake wanting to increase customer engagement and satisfaction, and for the overall flexibility of the grid.
Holistic apps that combine energy monitoring and control, such as those built on the basis of XENON are key. From mobile notifications that alert users when surplus PV is available, to clear visuals of where energy has been used, to reminders of how many emissions have been saved – such apps empower users and enable energy democratization.
By building their own HEMS solution based on XENON and complete with mobile apps, the energy supplier ENGIE in Belgium allows their customers to increase efficiency and savings. Better management of solar energy production enables an increase in self-consumption from 35% to 65% and enables cost savings of up to 355 € per year.
It all comes down to intelligent solutions that reduce complexity. Users have the power to lower energy bills and minimize emissions – energy companies simply need to build the solutions that put the power in prosumers’ hands.
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