Billing the Energy Transition

Billing the Energy Transition Guest blogger Henk Ensing, Technical Consultant at TNO, looks at the crucial role of billing in the creation of Smart Grids and Smart Cities.

Just a couple of weeks ago I had the opportunity to speak about the Energy Transition in front of a distinguished group of people, all of whom have made their mark in the Telco industry one way or another. The central theme of that session of course being revenue management, and based on the lively discussions in the room I can only come to the conclusion that today, billing is very much alive.

It has, however, become quite a different animal than the billing we’ve become accustomed to in the Telco area in the last decade or so. Sure, billing has already transformed from a subservient service supporting a straightforward set of products to a much more integrated service providing insight and transparency, and enabling the customer experience levels required at the starting of the internet age. However, I consider today’s excellent billing solutions to be a temporary measure, for there’s something quite different looming on the horizon. And what’s more, we can already see glimpses of that future. For that, one only needs to look at what’s happening in the area of Energy Transition.

In the Telco domain we’re quite familiar with terms like ‘unbundling’ and ‘deregulation’. And while the reasons for doing so may differ, much the same processes and developments are happening within utilities like energy generation and distribution organisations. There is however, one singular difference that makes the Energy Transition quite a game changer, to such an extent that it forces other industries to take note. This difference is the opportunity that ‘ordinary’ customers have to generate electricity themselves, also called decentralized energy generation. The exponential increase in Europe alone for people installing photovoltaic panels on their homes barely shows the enthusiasm that exists within households to become self-reliant and save money. 

While on the surface this may seem similar to uploading a video to YouTube, the consequences for the energy network (or grid) are much more serious, even damaging in the literal sense of the word. First of all the energy grid is dependent on a fine balance between supply and demand. Without going into too much detail, whenever this balance is lost, physical damage to the grid is a real possibility resulting in brown-outs extending way beyond the source of the issue. The current energy value chain includes an intricate system of checks and balances, predicting the necessary energy for a certain period in time for individuals and groups of users – all of which is being effectively managed by several distinct organisations that are responsible for specific parts and elements that make up the entire grid.

With that explanation in mind, calling an exponential increase in decentralized energy generation disruptive is clearly an understatement! It stands to reason that billing customers based on one measurement every year, generating a bill statement by subtracting last year’s measurement is wholly inadequate. To an extent, this has been catered for by introducing digital meters (a.k.a. smart meters), replacing analogue meters that have been functioning for decades. But rolling out new meters is just a start, as it’s stirring up a whole lot of new questions.  It’s what to do with the resulting data; it’s about who is going to process the data and for what purpose, to name just a few. These are existential questions being asked in boardrooms all over the energy domain.

These questions are also the starting point for Smart Grids and Smart Cities research projects that we participate in, and a wealth of other programs all over Europe and abroad. Smart Grid projects have shown encouraging technical solutions for managing energy grids in a ‘smart’ fashion using ICT.  And as we speak, we are focusing more and more on enabling processes like billing and providing real-time information to the end-user. The importance of the paper bill or its digital equivalent has in many projects been completely superseded by online (mobile) apps that show a complete overview of energy usage, generation and the monetary consequences. It allows end-users to make decisions based on predictive analysis; it also allows energy service providers to come up with tailored propositions. 

There are a multitude of reasons today and tomorrow that warrant a careful look at balancing energy supply and demand. The answer is not just technical, as there are many social and economic aspects to consider as well.  All this change has led to a situation where billing, often seen as a ‘dissatisfier’, is starting to mature into an essential enabler of the energy transition, becoming part of people’s daily life and providing insight and transparency at a hereto unseen level.  As I stated at the beginning: “Billing is alive”. I’d like to conclude with an even more confident:  “Billing is becoming more important than ever”!