• 27
    Oct, 2020
  • OPINION: The Energy Market Neither Understands, Nor Offers Value to the Final Consumer

We find ourselves in a sector of strategic importance for the Spanish State, as indicated by the Royal Decree-Law 23/2020 of June 23.

The objective of this decree is to promote a series of measures that favor economic recovery through:

  • – The mobilization of both national and EU financial resources
  • – Creation of sustainable jobs
  • – The necessary collaboration between budgetary, monetary, financial and structural policies.

With all these measures, the intention is to accelerate the transition process of the Spanish electricity system towards a climate-neutral, decarbonized one, with a fair social impact, that offer benefits to the most vulnerable citizens.

Or at least that is what is described in the RD-law…

All of this evangelism is great, but what does it really mean and how can we get there, in practice?

In our point of view, the key lies in the creation of new business models; of those mentioned in the RD-law, we highlight the following:

  • – Energy storage
  • – Independent aggregators
  • – Renewable energy communities

For PylonData, these are the main models that can really play the role of catalyst to accelerate the energy transition, since if we are not able to integrate consumers into the market, it will be difficult to achieve the objectives set for 2030.

Attractive, simple business models – with price signals – are needed

Of course, these three models need attractive and very simple business models, so that anyone can understand them. The main handicap in all three is the pricing policy that incentivizes them.

We will not be the first or the last to understand the need of creating price signals to activate the different business models that are coming, but yes, we must be able to implement them massively, as many anticipate.

And of course it will be the need to adapt to prices that will open the door to these new business models for:

  • Maximizing the utilization of your energy assets or consumption behaviors through independent aggregators.
  • – The possibility of consuming energy from collective plants without intermediaries through energy communities.
  • – The ability to maximize the economic performance of renewable assets through storage.

In the end they will be feedback effects, the greater the penetration of non-manageable renewable resources, the greater the increase in the use of the networks. This will be reflected in the price of tolls that will depend on the congestion, which will be reflected in the prices – eventually arriving at the establishment of the price signals mechanisms.

The momentum of the Spanish energy sector and the final consumer

From our experience and vision of the energy sector, we are facing one of the most interesting moments in the sector. In the next 10 years we will see countless new models and changes in the management of (distributed) assets, but we have to bear in mind that there will be no energy transition if we do not empower end consumers.

We have already seen dramatic failures in the sector before, and we believe that it is everyone’s duty to change and modernize the sector so that it can positively impact the only stakeholder that has been maintaining it for all these years: the end consumer, the citizen.

Access to the data is important, but what is done with the data is more important

In PylonData we believe in the need to promote a more personalized approach through the digitization of the sector, and all this will only be possible with access to data in a simple, easy and neutral way. The main handicap today is access to data, but what really offers value to the market is what we are capable of doing with data.

The “service points” will disappear and will become “municipal energy offices”

On one hand, we are used to the “service points” of the large retailers, which in our opinion are losing importance and relevance offering less and less value to the consumer. On the other hand, we are seeing an increasing number of energy information points set up by municipalities, since it is a neutral information point where information is prioritized over misinformation, delivering on the promise of empowering citizens. In the coming years, each municipality will have its own energy information point, surely leading to the creation of local energy communities, and all the models previously mentioned.

Consumers need a simple way to help them take decisions

In conclusion, the key to empower the end consumer is offering simple services that consumers can understand. In that respect, it is the energy companies that MUST help the consumer decide in the most neutral way possible.

 

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