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The Rise of Prosumers: Changing Paradigm In The Power Industry

For more than a century, the energy industry’s business model was static. There were power producers and consumers, period. Therefore, demand was quite predictable. Today, the emergence of ‘prosumers’ – power producers and storers/consumers themselves – has transformed the traditional model, leading to a two-way power flow.

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Moreover, these energy consumers can proactively choose the energy source they wish to consume. Consequently, environment-friendly renewable sources supply most or all the energy for diverse uses. The new landscape has created numerous opportunities for utilities and consumers in this two-way energy management.

Presently, prosumers comprise commercial buildings, educational campuses, military bases, factories, hospitals, residential homes and even entire cities – producing, consuming and controlling their energy use. One of the ways to meet demand-supply shortfalls is by managing power consumption via smart meters and smart grids. In industrial, corporate or residential settings, managing energy usage can help in reducing high power bills.

Utilities and grid operators realise the benefits of power management. Accordingly, some of them are promoting smart grid schemes for industrial and commercial consumers to deploy energy management practices, particularly in peak hours when grid blackouts from overloading are most likely.

Prosumer entities have also been investing in producing energy onsite through wind turbines, solar panels, combined heat-and-power systems as well as diesel or gas engine generators. Such local micro-grids can subsidise the cost of central grid energy. Additionally, if renewable sources such as solar or wind are available, it reduces an organisation’s carbon trail and boosts its image as a ‘green’ entity. The ‘green corporate citizen’ tag is so prized that, as per the Clean Energy Council, 15,000-plus Australian businesses have installed solar power systems, overall saving them $64 million on energy bills annually.

Even residential consumers are being incentivized to curb energy usage and generate power. Targeted programmes encourage them to regulate energy usage as per pricing signals, penalties or curtailment appeals. Thanks to the potential flexibility, consumers’ energy-consuming loads and onsite generation capabilities are treated as significant DERs (distributed energy resources) crucial for grid balancing.

Although ever-rising energy demand is straining decades-old generation and transmission grids, augmenting conventional generation capacity makes little sense due to stringent environmental norms. But while renewable energy is emerging strongly, supply is intermittent. All these factors make it tough to balance the grid, keeping energy prices volatile and enhancing power reliability risks for corporates and residences.

Nonetheless, the rise of prosumers offers a tremendous opportunity to handle such issues via effective ‘demand’ management. Here, ‘demand’ denotes everything from a meter or any network load-pulling electricity while ‘management’ refers to the degree of control over the load. The demand-management objective: providing utilities an alternative to addressing capacity needs by creating more power plants.

Prosumers being a sunrise segment, one of their first questions will be about what micro-grid could meet their needs. Comprehending this, Schneider Electric offers the EcoStruxure™ Grid to drive Grid transformation. EcoStruxure helps as an open, interoperable, IoT-enabled system architecture targeted at several verticals, including the Grid market and DSOs (Distribution System Operators).

What’s more, it offers greater value in the reliability, efficiency, safety and sustainability of operations via Grid, substation and meters. It also helps limit the duration of blackouts by locating faults faster. Its Smart Grid Analytics also ensures efficient operations and predictive maintenance.

For prosumers, there could be no better way to produce, store, use and save power.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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EcoStruxure Schneider Electric India

Prakash Chandraker

The author is Vice President & Managing Director - Energy Business, Schneider Electric

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