I just wanted to write a quick blog post on the misnomer that is Energy Smart Appliances (ESAs). This is a term that has been widely adopted in flexibility discussions and PAS1878 to describe domestic or small business assets that can respond to flexibility signals and provide demand response automatically. Conceptually, the idea is that these devices would have some inbuilt intelligence that allowed them to calculate flexibility offers and share them through Customer Energy Managers (CEMs) or Home Energy Management Systems (HEMs) to Demand Side Response Service Providers (DSRSPs), energy loves an Acronym!
My issue with this description is it gives a misleading impression of the smart capability being integrated.
ESAs typically fall into three categories.
1. HVACs (Wet or Dry Heating or Cooling systems)
2. Batteries
3. Chargers
And they can provide one of three types of flexibility
1. Turn up demand (increase / turn on demand during energy gluts)
2. Turn down demand (decrease / turn off demand during energy shortages)
3. ‘Production’ of energy on demand (discharge stored energy during energy shortages)
Some ESAs can also support Frequency services, just for completeness.
However, some emerging designs of ESAs are choosing not to integrate the ‘smart’ element into an energy appliance, instead limiting the capability to short-range communications capabilities and zero onboard intelligence. In essence, making the Energy Smart Appliances an Energy Connected Appliances! This could be a good thing.
Why? If we have learnt anything from technology over the last 20 years, it’s that innovation moves fast, and devices with onboard computing end up with short lifecycles. Quickly falling behind in computing power and memory capacity requirements. This looks to have been recognised by some ESA manufacturers/service providers, and they seem to be opting to move the logical ‘smart’ element of ESAs in the PAS1878 architecture into the cloud.
The cloud-based approach has many advantages. It allows frequent and long-term updates to the software capability and security. It also allows easy scaling of system capacity as the solution evolves and demands increase. This is naturally appealing to manufacturers/service providers and benefits consumers in prolonging the asset usefulness in supporting demand-side services.
It does, however, have risks. There is a temptation for service providers to develop bundled asset and services packages for consumers that could lock them into proprietary and uncompetitive services. This could leave consumers with poor returns on their investment in the ESA and unable to switch to a better provider. This leaves them unable to find better service if they are unsatisfied with what they are receiving, or they are left stranded if the service provider ceases trading. It is important for any domestic flexibility services to have clear benefits for consumers and adequate protections that enable competitive markets and services to thrive.
So, how do we mitigate the risks whilst retaining the benefits of the cloud?
Currently, all of the focus for interoperability is on defining the interface between the DSRSP and the CEM. I think the answer is to lightly regulate the local connection, too.
What this means in practice is:
1. Having a principle of any energy appliance with their ‘smart’ functionality sitting in the cloud being required to have a widely adopted connectivity standard, I.e., Zigbee, Thread (Matter), MODBUS, Bluetooth etc.
2. Ensuring regulators like the CMA and Ofgem are monitoring that anticompetitive behaviour or other practices are not preventing 3rd party service providers developing connectivity to the Energy Smart Appliances or limiting functional capability access.
This has the added benefit of providing clarity for OEMs and keeping asset costs down whilst extending lifespan.
In conclusion, let’s put consumers first, stop overselling the capability of the hardware, make connectivity and compatibility key, and embrace the cloud. Make it simple and allow competition to thrive. This is the way to make solid foundations upon which to build flexibility and data services for domestic energy. I would welcome your views and the readers’ opinions in the comments or directly. What else needs to happen technically to make domestic DSR work? As always, Engage Consulting have the capability to help you design, test and deliver DSR services. Get in touch to learn more!
