Original article by Veronika Spurná and Helena Uhde
ECECP Junior Postgraduate Fellows
Decarbonisation, decentralisation and digitalisation are the buzzwords often used by energy experts to talk about the transformation of the energy sector. As the share of renewables rises and competition heats up, the number of actors in the system is increasing exponentially. ‘We are going from a system with hundreds of devices to a system where millions of devices will have to be controlled and there is no way we can do this without digital tools,’ says Alexandre Torreele, CEO of re.alto, a start-up that is building a European marketplace for energy data products and services.
Data is an essential part of the energy sector’s digital revolution. Necessary calculations, such as forecasting supply and demand or optimising the electricity grid, would not be possible without the corresponding data. In a decentralised power system, with roof-top solar and electric cars, millions of connection points need to be aligned. The remaining challenge, without a central search engine for energy data, is that data remains fragmented and difficult to find. Even within individual companies, connectivity is often low. With the acceleration of electrification in additional sectors such as heating and transportation, data transfer across sector borders gains in importance. And,, in the EU, where free movement of people and goods is a cornerstone of the internal market, the flow of electrons and data should not stop at national borders. ‘Hopefully one day, you’ll be able to travel on holiday with your electric car,’ says Torreele. ‘If we want to make any headway in the development and innovation of energy services, we need a truly pan-European scope to enable frictionless data exchange between all the different market players.’
Solution: a marketplace for energy data
This is why re.alto, a corporate startup of Elia Group, has developed and built a marketplace that facilitates the discovery of data sources and supports the integration and management of their clients’ systems. It is aimed at companies across the energy sector, among them renewable energy developers, traditional utilities and traders. These companies can then share, subscribe and sell data on the re.alto platform. Current data provided on the marketplace includes the weather, wind and solar generation, energy pricing, e-mobility, smart meter data, analytical services and more.
The demand for external data is intensifying – data is needed to predict the consumption and generation of renewable energies, and to optimise the use of batteries and the charging of electric cars. Not all clients want raw data, some companies prefer pre-processed data or readily analysed products that can easily be integrated with their own systems. ‘We’re a bit like these meal kit companies that bring you a recipe with all the ingredients already measured out. Depending on the maturity or the willingness of our clients, they can either select a small quantity of data packages, ready to throw into their frying pan or, if they don’t have time to cook, we can provide them with a ready-to-use product,’ says Torreele.
Standardisation of data through APIs
The data needs to be standardised if this cross-border data transfer is to be guaranteed. This is done via application programming interfaces (APIs). APIs appeared a long time ago and are used widely in the insurance and finance sector to exchange data internally between departments and systems and externally between different applications, yet they represent uncharted territory for many actors in the energy sector. APIs are the interfaces for products that can be bought on the re.alto energy marketplace. According to Torreele, ‘the most useful APIs provide the foundation of the data that is needed to optimise the comfort of end-consumers or to improve the reliability of the system. This includes market information, grid data information and weather forecasting, which is important to forecast not only centralised, but also decentralised solar power generation.’ In the marketplace, APIs become products that offset the costs of collecting data collection and represent a source of income for the data providers.
Application programming interfaces (APIs):
Developed by Frank Bergler in 1996, APIs are standardised interfaces that enable the exchange of data. A distinction can be made between internal and external APIs: Internal (closed) APIs are only accessible within a company’s intranet and support data sharing between different departments, while external (open) APIs permit data exchange with third parties. In the energy sector, APIs facilitate the transfer of data between various stakeholders such as network operators, prosumers and traders and thus enable more efficient optimisation of power grids and access to new business models (Anthony et al., 2020).
Besides monetisable data, there is ‘open data’, a concept defined by the Open Knowledge Foundation as ‘data that anyone can freely access, use, modify, and share for any purpose’. To support the exchange of open data and improve transparency, the EU launched the EU Open Data Portal in 2012, where different EU institutions provide freely accessible data. One of them is DG ENER, which provides access to energy datasets. Open energy data can also be found on the European Data Portal, and the ENTSO-E Transparency Platform, where European member states have to publish information relating to electricity generation, load, transmission and balancing. On re.alto’s market platform, open data is provided for free. ‘For us, open data is lowering the entry barriers for data sharing, so we fully support that. However, we also need to recognise that some data sources require significant effort and cost in collection, maintenance, storage and the like, and this naturally makes it higher value, so we certainly can’t say that all data should be open At re.alto we promote both free open data and data with commercial terms,’ says Torreele.The creation, processing or visualising of data creates an additional role for specialists along the whole supply chain, and a new area for monetisation. According to a McKinsey study on data monetisation, half of energy utility respondents have started to monetise data, which is correlating with a better performance compared to industry peers (McKinsey, 2017). Some data bring direct benefits in the form of process optimisation or savings, while some benefits are more indirect and harder to measure, such as user experience or specific data processing. We are still in the early days of data monetisation and companies have yet to figure out how to manage their data streams effectively and demonstrate their commercial value.
Around 72 % of European consumers had a smart meter for electricity in 2020, according to estimates by the European Commission DG ENER and the Joint Research Centre. Once the EU’s roll-out of smart meters is implemented by the member states, the resultant data could facilitate demand response and other energy services. Would end users be willing to share their data with service providers? According to Torreele, consumers would share their data if they got something in return, for example a new service such as energy monitoring applications or a cheaper or greener tariff. Other options might be to optimise prosumer installations or to build local energy communities, i.e. peer-to-peer energy trading. ‘At the moment, the easiest opportunity for utilities is to use the consumer data generated by a smart meter to create a seamless, multi-channel experience. The monetisation of consumer data is clear in terms of business value, but there is a lot of legislation,’ says Torreele.
The management of personal customer data is challenging, since data providers have to take homeowners’ privacy and security concerns seriously and obtain their consent before collecting and using the data (re.alto, 2020). Rules for data and consent management have been stipulated in the General Data Protection Regulation (GDPR), which was implemented by the EU in 2018. ‘Data security is an absolute priority for us. Security regulations such as GDPR and ISO/IEC 27001 help us to be very clear about our processes. We’re currently in the process of getting certified. We’re a young corporate start-up, but in order to be able to provide high standard services to our clients, we need to have these certifications,’ says Torreele. In its report, ‘Cyber Security & Digital Privacy in the Energy sector’, the European Commission acknowledges that large-scale digitalisation cannot happen without adequate cybersecurity and consumer protection. While digital technologies are playing an increasingly important role in the energy system, the risks of cyber threats are growing as well. Relevant EU funded (H2020) projects, such as a working group on regulation, are bundled under the BRIDGE initiative. ‘At present, the standardisation is a little bit wild west. We need standardisation, but in a pragmatic approach, and not a top-down theoretical intervention, because that is actually killing a lot of small players and business ideas.’ suggests Torreele.
Despite the challenges, re.alto looks hopefully into the future. 2021 is going to be an eventful year. ‘It is the second year of our existence, so this is the moment of truth: are we actually achieving our goals?’, wonders Torreele. ‘It will hopefully coincide with the post-Covid era, where companies will understand that they have to accelerate their digitalisation, and we will be there to offer the tools.’