Towards the « uberization » of the electricity market?

No better buzzword today in the economic landscape than “uberization”! As much because t’s new as by fears and fantasies that it triggers!

To better define the term, I defer to the French Observatory of Uberization founded in 2015. Uberization is an economic model resulting from three trends:

– The desire for independence of the actors, workers and consumers first

– The search for a better service and new consumer experiences

– The pervasive deployment of digital technologies

According to this definition, must we fear or hope for the Uberization of the electricity market?

First, in Europe, the photovoltaic panels are insufficient for a residential customer to be autonomous for its electricity production. Among the major European countries, only Spain could produce the average annual consumption of a household with less than 35 m2 of photovoltaic panels … which is already an important surface – correctly oriented to produce – for a single household.

As fuel cells and other autonomous production technologies are not available and cost-effective yet on the market, households will need an extra power from the network. The autonomous house is not for the next 10-20 years.

In countries where the seasonal summer / winter is marked, storage during a whole season is required to prevent under-production part of the year. This storage will be much larger than the one proposed by Tesla and profitability will be almost impossible to achieve. The inability to store electricity produced part of the year, even partially, will penalize the profitability of some of the electricity production means.

If the household independence will exist and develop, their ability to disconnect a day of network at an acceptable cost, will be limited during the next 20 years.

Independent producers looking to provide and share their extra production with their neighbours is not a fiction. However, they will have to use a network capable of carrying these electrons and a player to manage the balance of this network will still be needed… task quite inaccessible to the uninitiated. The distribution network operator (DNO) will remain an essential intermediary.

These few observations – I Could add other similar ones – draw a possibility of uberization of the electricity market that will develop in a more constrained environment in which the DNO remains central. Consumers will not be completely free to overcome the utilities.

Therefore, this ” uberization ” may take time if it develops in a difficult relational context between utilities defending their current position and their customers and it may leave some consumers sceptical of the economic interest of this movement. Utilities, for reasons I will discuss later, may accept this perspective or not!

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