Should energy companies oppose the electricity market’s uberisation?

In a previous article, I mentioned the changes in the energy market that can be related to the uberisation trend, especially the generation activities.

The fragmentation of energy systems, observed recently, has several origins: technological, economic and sociological. I propose to consider in priority one potential cause of uberisation: the will of consumers to be more independent. At first glance, it does not seem as important as others but might be for energy companies as essential to consider.

Why? What attitude should be adopted by energy companies towards this trend? Should they oppose or, conversely, accompany? Does it represent for them a threat or an opportunity?

Spontaneously, we see only disadvantages to the uberisation of the electricity production for energy companies:

  • The balance of the network is more difficult to achieve
  • The energy cost of production increases with a mix incorporating more and more distributed renewable energy
  • Part of the electricity production becomes less controllable
  • The way is paved for a sharing economy: micro-producers want to share their production with their neighbours. A part (small in the short-term) of the electricity escapes the distribution networks.
  • The economic balance of network costs is questioned

All these points are pushing energy companies to object, curb, hinder the uberisation move, though this move is sometimes supported by a favourable regulation. Some regulations are also opportunistic or short term oriented; they are not designed in a systemic framework that is taking into account the potential impacts on energy systems. They are then abruptly adapted or withdrawn once emerge their unexpected consequences, making the evolution of the market more erratic and less predictable.

I am not sure that such an opposition from energy companies is virtuous. “Being totally energetically independent” is illusory for many consumers. But the desire of being “independent” seems to me deeply and firmly anchored. If traditional energy companies don’t support consumers in acquiring and optimizing the benefits of this independence, the consumers will find solutions, apart from energy companies. The loss of business will then be completed with a loss of credibility, that could be much worse.

Rather than opposing, the energy companies should rather support consumers by providing autonomous energy solutions enriched by a set of services, necessary to optimize their investment such as compensation and automation mechanisms for using electricity storage during rush hours, dynamic pricing or operational services for self-producers and self-consumers communities.

Of course, the buildings will become autonomous energy producers.

Of course, consumers have a desire for independence they will also express in the field of energy

Of course, the desire to share with others will also gain self-producers

But this view does not describe the world of tomorrow but of the day after tomorrow.

This leaves time for energy companies to organize and manage several stages of change and to position themselves as a key link for optimizing and achieving consistency of these new energy systems. It is time for them to start: the first movers will not only succeed in a few years but they will differentiate themselves greatly and very quickly.

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