April 28, 2023
Last updated:
June 15, 2023

Reduce. Reuse. Recycle. – Circular economy in the energy sector

If we tell you that the energy transition plays a vital role in the global battle against climate change, you will most likely agree. We know from enough studies that it must succeed – there is simply no other way, no more time for failure. The energy industry has identified that the key to the success of the energy transition is sustainable power generation, namely renewable energy. Taking a closer look at our current path towards a sustainable energy future, the three Rs of the circular economy – reduce, reuse, recycle – also hold true for the energy sector. 

Before jumping in, let's do a quick recap of the circular economy and its characteristics.The concept of the circular economy goes against the linear principle of ‘taking, making, disposing’. The circular economy aims to reduce the use of raw materials, water and energy in the production of goods and services and minimize waste produced in the process. The model aims to preserve the value of raw materials, maximize their lifecycle and reuse them for the production of new goods. By transforming the entire value chain, circularity minimizes waste, energy consumption and carbon emissions, supports economic growth and fosters innovation. But how can the circular economy be applied to the energy sector?


IoT is one major factor that brings innovation to the energy sector – it adds a layer of intelligence to the system. IoT solutions, such as our energy management platform XENON, can help shift energy generation away from conventional energy resources – such as natural gas, coal or fossil fuels – and enable an accelerated transition to renewable energy. By connecting renewables with electricity-consuming devices, IoT maximizes the use of clean energy, minimizes risk, accelerates the scaling of renewable energy projects, and minimizes the costs of new infrastructure and systems. In short: everything works smarter not harder, by using brains rather than copper. 

Speaking of copper, IoT is an important factor when talking about reducing the use of raw materials in the energy industry. Connecting and controlling distributed energy resources (DERs) with IoT technologies allows grid expansion to be kept to an absolute minimum. Why is that? Smart management of energy flows can, for example, balance out loads in existing energy infrastructure and thereby effectively reduce overload risks in the grid – also in times of abundant renewable energy. Smart districts are a prime example: areas in which assets of multiple energy forms are collectively managed. Smart districts combine clean energy technologies with digital infrastructure to maximize self-sufficiency without impacting residents’ comfort. Avoiding costly and time-intensive grid extensions with the help of smart energy management not only shrinks our dependence on critical minerals, such as copper and aluminum, but also gives utilities more time and money to invest in innovations that build advanced energy systems of the future.


IoT is no silver bullet. Smart technologies will reduce the need for grid expansions but they will not erase it. However, it can reduce them to an absolute minimum and ideally make better use of (or reuse)  existing infrastructure. In the case of EV charging, charge point operators (CPOs) can leverage IoT-based energy management, for example dynamic load management, to more quickly and cheaply scale EV charging infrastructure by using existing grid infrastructure more intelligently. 

Smart technologies are crucial to enable a circular economy in the energy industry

The energy management system monitors and dynamically controls EV charging loads so that neither sub-fuses nor grid connection points breach their limits. It can do this by shifting loads – even with a large number of charge points or many simultaneous charging processes at a single site. Dynamic load management facilitates local monitoring of the site in real time, enabling intelligent control and thus optimal utilization of the available power. In this way, up to eight times as many charge points can be installed at one location.


The volume of installed decentralized energy assets is rising constantly and more and more EVs are hitting our roads every day. For all the good the energy transition is bringing to our planet, one thing is often left as an oversight: decentralized energy assets won’t last forever. Similar to other technologies, their lifecycle will end at some point. And then? Once it does, we will face an immense pile of scrap that needs to be disposed of. Disposal, however, is by no means the best route. 

The gray energy (primary energy produced from polluting sources) put into assets’ production and with it the raw materials would go to waste if they were not repurposed and given a second life. Recycling components that would otherwise be discarded maximizes their value.  As discussed at gridXdays last year, recycling old components is  crucial to not only reduce waste, but also the amount of new minerals that must be sourced. Methods of recycling green technology already exist today. For example, old EV batteries can be given a second life as battery storage systems in residential or industrial applications to extend their lifecycle for many more years. Such methods must be emulated across the industry to  minimize exploitation of the planet's natural resources.

The three Rs of a circular economy – reduce, reuse, and recycle – clearly play a key role in guaranteeing a successful energy transition. While they are unable to solve every challenge facing the energy sector, they can  enable us to better use existing infrastructure, uncover new methods of energy generation or recycle raw materials to secure truly sustainable and circular energy systems. We already see smart technologies like our XENON platform making energy flows efficient and grids fit for renewable energy, which reduces our dependence on additional raw materials and conventional energy generation. IoT technologies also allow us to make better use of existing infrastructure, while new methods of recycling components are constantly being developed. It is therefore clear that with a focus on innovation and circularity the energy sector can not only decarbonize but also guarantee longevity and adaptability in a rapidly changing world. 

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