Washing When the Wind Blows

Feature Article | July 3, 2009 by Susann Leder

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The Internet of Energy aims to ensure that the right amount of electricity gets to the right place at the right time – and as sustainably as possible.

In this research project, SAP and other software companies have joined forces with renowned research institutes and utility companies to intelligently coordinate power generation and consumption.

These pioneers are leading the way to the energy market of the future. Dr. Orestis Terzidis, who heads the working group, revealed more about the goals, the challenges, and the progress so far in this complex project when he spoke with SAP.info.

SAP.info: What does the Internet of Energy aim to achieve?

Dr. Terzidis: The key idea is to harness the available information associated with energy much more intensively. Because time is running out. We have to use energy more efficiently. Fossil fuels are becoming scarce, which means they’re getting more expensive, too. Nevertheless, the growing population demands still more energy.

This, in turn, increases greenhouse gas emissions: Since the Industrial Revolution, the amount of CO2 in the atmosphere has increased by 40%. In a worst-case scenario, the temperature on earth will have increased by up to six degrees Celsius by 2100.

SAP.info: And renewable energy – from the wind, water, and the sun – can help us escape from this dilemma?

Dr. Terzidis: That’s right. But the increasing use of renewable energy sources must be integrated with the existing power supply. Supplying electricity has tended to be a centralized activity over the past decades, with a few large generation companies serving many consumers. Deregulated energy markets are changing this now, though.

We can assume that, by 2015, a large number of local and fluctuating players will dominate the market. As well as having to cope with surges in voltage more flexibly and manage power flow more efficiently, this change will require common interfaces over which participants can communicate and interact.

And this is where the Internet of Energy comes into play: It links up all the components in the energy system intelligently and electronically, mapping them on a virtual platform. That way, the old, passive power grid with one-way communication is transformed into a market-focused, service-based, and locally organized system.

SAP.info: So it’s a bit like eBay for electricity?

Dr. Terzidis: Yes, to simplify the idea somewhat, we are talking about marketplaces or micro markets for electricity. In any case, new business models are imaginable, where providers put their energy package on a platform and anyone who needs electricity at a particular time can buy it for a certain price.

And to get back to energy efficiency: Prices are determined by supply and demand. In other words, if there’s a lot of wind power available at a certain time, then the price falls – and vice versa.

As a result, private customers, public institutions, and small and midsize companies can reduce their energy consumption or postpone it until peak loads or bottlenecks have passed.

All this is made possible by an increased use of energy-optimizing building automation and smart metering.

It’s a win-win situation for all parties. Private households save money, the environment is spared unnecessary CO2 emissions, and energy companies can avoid expensive and environmentally damaging peaks.

New business models in the Internet of Energy

  • Grid operators become information service providers
  • More attractive contracting models, especially for small generators in private households
  • Wholesalers purchase energy resources and sell them on as tailored products
  • Secondary products to safeguard against price fluctuation, forecast uncertainties, and weather impacts
  • New service providers such as virtual balancing power plants
  • Dynamic electricity prices

SAP.info: But do we have the technology to implement this?

Dr. Terzidis: The technological power grid of the future – known as the smart grid – will develop with the infrastructure that it has today as its basis, but it will also use completely new components. Many of the building stones for a smart grid are already available but are not yet universally deployed.

Building automation – which I mentioned already and which is also known as the smart home – isanother important factor. In addition, smart metering is increasingly in the public eye at the moment, and this forms the digital link between the grid and the buildings.

Furthermore, innovative business applications now exist that can support new business models. And developing good integration technologies is another decisive factor.

But so far, these components and technologies have hardly been linked together. Service-oriented architectures (SOA) are especially good at flexibly coupling and decoupling individual components.

SAP.info: What hurdles are you expecting in terms of implementation?

Dr. Terzidis: Our vision is to develop an open, reliable, and secure platform that allows for innovation to take place. I believe that user acceptance for the Internet of Energy depends on how easy and secure it is to operate.

In the end, technology must absorb the complexity of the Internet of Energy. Imagine that you leave for work in the morning and you want your laundry to be done by the time you get home.

You don’t want to deal with complex technology or answer a list of questions just to get this job done. What you really want to do is make a decision: Do I do the laundry now or do I do it economically? You make the decision at the touch of a button – red for doing the laundry right away and green for ecologically sound laundry.

If you press the green button, the system checks out the weather forecast to chose the right time to run the washing machine as carbon-neutrally and as economically as possible.

To put it simply: The washing machine washes when the wind blows.

SAP.info: What are the next steps on the path to the Internet of Energy?

Dr. Terzidis: We are planning a number of subprojects in which we can test out the theoretical framework in a hands-on large-scale experiment. These include, for example, the MEREGIO model project (Minimum Emission Region), which got underway at the beginning of the year. In the model region of Baden-Württemberg in southwestern Germany, 1,000 private and commercial customers are testing the Internet of Energy on a virtual platform.

This project gives us the opportunity to see how innovative business processes such as variable electricity rates or the economical use of combined heat and power plants or fuel cells actually work in real-life situations on the part of prosumers – that is, market participants who both produce and consume.

Dr. Orestis Terzidis

Dr. Orestis Terzidis is Research Director of the Campus-Based Engineering Center (CEC) in Karlsruhe, Germany, which is one of SAP Research’s largest research centers. The CEC Karlsruhe is an important interface between pure research and SAP product development. Scientists and students develop new products and technologies, and build prototypes. Orestis Terzidis studied physics and has worked for SAP since 1998 – initially as an application developer in southern France, then as assistant to SAP’s former CEO Henning Kagermann, and since 2004 as head of the CEC Karlsruhe.

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