Energy Transition Handbook - Flipbook - Page 48
Hogan Lovells
48
Energy as a service
Energy is no longer simply a commodity with new and increasingly sophisticated
“Energy as a Service” (EaaS) solutions offering access to renewable power, combined
with energy storage, energy efficiency measures and intelligent energy management
and asset optimisation.
The general shift from asset-focused, centralised
power generation and one way, vertically
integrated supply towards multi-directional,
distributed generation combined with advances in
technology, digitalisation and big data analysis has
increased the value of energy flexibility and the
potential of active energy management solutions.
The early EaaS market began with energy
efficiency and renewable related business models,
from LED lighting retrofits, where repayment for
the upgrades is through the energy savings made,
to residential solar systems, and payment for
the installation and maintenance is made under
a “solar lease” or “solar PPA” arrangement with
a supplier, rather than the customer incurring
upfront capital costs. These models allowed
service companies to profit from energy cost
savings, promoting the adoption of energyefficient technologies and closing the “energy
efficiency gap”.
Today’s EaaS solutions use technology and
algorithmic automation to offered managed
solutions combining clean power, microgeneration
and decentralised supply, energy/battery storage,
new technologies such as electric vehicles and the
use of smart meters and smart devices and data
to optimise asset management how and when we
consume or generate power and to reduce our
overall consumption and carbon footprint.
EaaS solutions create an opportunity to arbitrage
the wholesale and retail price of power, to avoid
system costs (for example by “peak shaving”:
taking a corporate off-grid at times of peak load
where systems costs are highest), to generate
revenues through a share of energy efficiency costs
savings arising from effective energy management
and to generate additional revenue streams by
using corporate and residential energy demand
flexibility to provide demand side response and
other ancillary services to system and network
operators. They can also create steady, ongoing
revenue streams for the solution providers
through subscription or service payments,
rather than traditional energy supply payments.
Case Study
In March 2019, Mitsubishi Motors Corporation
unveiled “Dendo Drive House”, a packaged
energy system comprising an electric vehicle
(EV), a bi- directional charger, solar panels and
home battery, and that bundles together the sale,
installation and after-maintenance of the system
components. The package allows the customer to
charge their EV (or plug in hybrid) at home using
solar generated power, and to supply electricity
from their EV into the home. The Dendo Drive
House system reduces reliance on the grid and
aims to deliver significant cost benefits to the
customer. The power in the EV could also serve as
a backup in the event of a power cut in the home.