28-09-2012, 12:03 PM
Cloud Power
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Introduction
This paper introduces the concept of
Cloud Power: an energy community
striving for a self-sufficiency for
electricity based on energy from
renewable sources. The concept
is currently under development
at Capgemini in cooperation with
TexelEnergie in the Netherlands.
Cloud Power provides the advantages
usually associated with smart grids
but starts from the consumer’s point
of view.
Challenges for to the industry
The energy industry currently faces a
number of challenges that require it
to change. These challenges are driven
by climate change, dependency on
foreign fuel, fuel depletion, and the
increasing electrification of society.
The industry thus has to reduce its
carbon footprint by using alternative
sources of energy while increasing its
overall output.
Cloud Power
As long as the costs and benefits of
smart grids are unclear for consumers,
it seems legitimate to look for smallscale
solutions that present tangible
results to consumers at a reasonable
price. The solution shall provide
choice in the sense that consumers
can ‘opt-in’ when they think fit and
‘opt-out’ if not. Finally, the solution
shall be democratic in the sense that it
enables individuals and communities
to define their own objectives.
Local electricity solutions have been
proposed as micro grids before. These
solutions, however, assume that the
grid is owned by the community that
uses it. Besides the problems of raising
capital for such a grid, however small,
micro grids require the community
to be co-located and are based on the
‘all-in’ tenet.
Segmentation
The Cloud Power community revolves
around the common objectives which
de facto determine the identity of the
community. The objectives form the
basis of the long-term plan for the
community. Potential participants can
take notice of the plan and determine
if the plan fits their individual
objectives and their available
resources.
The long-term plan can be considered
the equivalent of customer
segmentation in marketing terms.
The plan is based on the needs of
a specific segment of consumers
and reflects the perceived needs for
energy supply for this group. A longterm
plan can be compiled for either
existing communities (e.g. smallscale
energy companies and housing
corporations) or can be designed for a
completely new group of consumers.
Internal market
A well-known issue with respect
to the integration of distributed
generation (especially of renewable
energy) is the fact that in most
markets individual consumers have to
sell their surplus of energy for prices
that are far below the actual price
levels in the market. To overcome this
problem Cloud Power is based on an
internal market where electricity is
exchanged between participants of the
community for prices that reflect the
actual balance of demand and supply.
As an additional advantage, the
internal market for Cloud Power does
not involve any transactional costs
for the exchange of energy between
(individual) participants.
Conclusion
The concept of Cloud Power presents
a number of advantages over the
smart grid approach. Cloud Power
reduces the issue of split incentives
because participants voluntarily
enroll and have freedom in how to
engage. As a result, the utilization
of equipment will be more effective
than in situations where consumers
are confronted with a fixed solution
presented by another party.