The Universal Smart Energy Framework (USEF) is set to revolutionise the power industry, and open up the smart and renewable technology markets. The open framework is designed to accelerate the development of smart energy products, services and solutions for large-scale implementation of Smart Grids. As the opportunities to use and store energy are increasing, a new smart energy market is developing. Below is our Interview with USEF Technical Director, Frits Bliek.

What were the key triggers for this collection of companies to spin off from the Smart Energy Collective to create the Universal Smart Energy Framework (USEF)?

USEF was born out of the observation that our energy system is rapidly changing at the moment. Consider the wind turbines arising in the fields, the growing popularity of rooftop solar, and the increasing number of energy technologies present in modern homes, such as heat pumps and fuel cells, all allowing people to generate their own power.

People are inclined to organise their energy system in different ways to what we have seen previously. New energy communities are arising within the European energy market, those communities want to have a voice in reshaping the energy market and they want to become both downloaders and uploaders in the new system.

Of course the system was never designed in that way, and most people got used to the idea that, when you switch on a light bulb the central power plant speeds up a little, with production always meeting demand. The future system however, should be a bi-directional system with three key elements. Anyone should have the freedom to dispatch their own power source, they should have free access to the system, and we should have freedom of transaction.

Based on these principles we sought to create a user framework in a smart way, to ensure the flexibility needed in any future energy system. In a flexible system, the residential end user may load their washing machine, for example, and the system would start the wash at the optimum time for energy use, taking into account the user preferences.

Efficiency must be central to any new energy system, where does USEF see these increases in efficiency?

From the supply side, we must endeavour use the most efficient source of energy at any point of time. Another driver of efficiency is the ability and capacity of the grid to transfer the energy efficiently and flexibly.

There are two distinct groups who desire that flexibility, suppliers looking for opportunities to match supply and demand of energy and hence optimize the generation by their power plants. The other group are grid operators who may identify high load areas and seek to reduce it. If undertaken in a smart way, it can create efficiency in distribution and load balancing. Energy storage can then add another level of flexibility.

It is worth noting that electricity is the only system where supply and distribution happen at the same time. The vast majority of supply chains have completely distinguished processes in this regard.

Considering the rapid transition underway in our energy system, does the USEF framework take into account our current system and anticipated changes in the future?

There was no way to plan the framework from a greenfield situation. USEF looked at the existing energy markets, which are primarily functioning at the wholesale level, where the large energy players are present. And we are looking at opportunities for new players in the energy markets, that aggregate the flexibility of medium sized enterprises and consumers who become active in exchanging power.

We see significant developments that enable demand side flexibility. This occurs in the same context as the Internet of Things (IoT). Many devices are now connected and often contain their own battery systems creating a huge amount of flexibility. It is really about finding ways to unleash this flexibility and create value with it in the energy system and to be prepared for new developments, such as the increasing popularity of the electric car.

The structure of the framework will shake up the flow of money from the traditional power production and distribution system. Have you encountered, or do you anticipate any significant resistance from current energy industry players?

I’m not sure I would call it resistance, but I have noticed for quite a while that there were two distinct discussions happening, one on the supply side of energy in the European market and one on transport and distribution side.

Both sides are looking to reduce the peak load on the system, on the supply side we would be looking on a centralised level for a certain country or region. While on the transport and distribution side, you are looking at individual linkages.

It took me a while to identify the actual issue, but it is now clear that both sides of the discussion are seeking the same thing; a smart, reliable and flexible energy system. They just apply it for a different purpose. Then we realised that the two sides fuse together, because of those shared interests.

USEF has had an important role to play in that process by creating a framework, which takes the latest innovations into account. We drew strong similarities between this energy framework and the framework created by the GSM association for the rapidly developing mobile telephone market. Both frameworks are very open, supporting the success of all interested parties, and are there to accelerate the development of solutions in the market.

What predictions can we make on the speed and scale of our development towards this kind of energy system?

It is difficult to pinpoint exactly how fast it will happen but if you look at the technology innovations taking place we can estimate a significant increase in market volumes between 2020 and 2030. Some technology is developing quicker than anticipated, such as electric vehicles (EV). If that reduces the cost of batteries then it can be just a few years and the whole system will change. The same could be said for the development of fuel cell cars being disruptive to traditional power generation.

It is difficult to predict but preparations do need to be made to allow for this innovation to take place. From a regulatory perspective, it is very important that the European Commission gives direction on how they want to change the market and allow these types of solutions; we expect this to happen between 2016 and 2018. Once the regulation is in place it becomes clear for the energy industry, and its supply industries for IT and devices, meaning we could see a quite rapid development at that stage.

Is there a limit to the type of powered devices, which could be connected to a system such as USEF?

The system has been designed to unlock flexibility in such a way as not to exclude any potential appliance. Each LED light could be incorporated, but the real question is, whether it would add value to the system at a certain point in time.

Currently we are only looking at the large power consuming elements of the building. Residentially, the heating system is very interesting, EV charging looks to become increasingly important, and on a lower level laundry and so on could play their part.

The building should always be looking to balance its energy use, to operate as cheaply as possible. Under most regulatory conditions, this means using your own generated power as often as possible, as it needs little transport and generates no tax. However, that is not to say that every appliance benefits from being smart, a freezer for example knows it needs to be kept cool all day so being connected to a system offers little additional value.

USEF’s framework does not prescribe how to optimise the system, that will come from technologies like powermatcher. There are dozens of algorithms that can optimise a portfolio and fit within the USEF framework.

USEF have focused on interoperability to provide a platform to allow for optimisation as more and more devices are added to the system. We are also trying to ensure that the cost to connect is as low as possible, meaning how you connect your Building Energy Management System (BEMS) to your energy supplier or aggregator, as the case may be. If we all use the same system, such as through our broadband connections, it could be more cost effective.

On a higher level, USEF would like to ensure the lowest cost to serve possible. Currently there are between 2000 and 3000 players in the European market, but the number of new players in the market, like local energy communities, is rapidly rising within the market. We group them, within this framework, under the name of aggregators or energy service companies. If you increase these numbers of players in the energy market within Europe by a factor of 10, each negotiating their own conditions to access to the market, you end up with a completely unmanageable system.

USEF’s framework is providing standardized access to the market, so anyone can start an energy business. Any retail party can sell the flexibility of their end users to the existing energy market, creating value and reducing the cost to serve. But even an end user may choose to become an aggregator. USEF’s framework identifies the role and its connection to the market, which can be implemented in any way they like. It does not define a business model for aggregators.

There is a need, or opportunity, for new service providers, technologies, and appliances in the future energy system. Do you see this innovation coming from new or more established companies?

We are seeing innovation coming from both traditional players and emerging companies. It is currently a quite fragmented market, which is good in principal, because the conditions are good to accelerate development of the market. However, it would develop much quicker and create more value if it was an integral solution.

Similar to the development of the mobile phone industry, where there were many smaller innovate companies developing new services, while the larger companies focused on the more robust infrastructure elements of the system. At one point in time these two sides came together to accelerate the market even further, to bring us to the point where calling is now just one small function of smart phones.

One of the issues we are facing is being fast enough at communicating the benefits of the framework to a market that is constantly evolving. Everyone has their own view on how it should work, even if there is a need for such a framework to accelerate their own business. In the short term it is nice that you have access to the market and can sell your products, but in the long term you really want to have access to all the consumers, so you really need a framework that is applicable to anyone.

Much of the talk so far has been about residential buildings, how do commercial buildings compare and fit into the framework?

Each commercial space or industry will have its own unique needs and flexibilities; creating a standardised solution for any specific industry just takes more time, in my opinion.

Office buildings are an interesting example, they have quite a similar structure to residential buildings; they offer a lot of flexibility in heating systems for example, there is also a large scope for EV charging and a need to manage their consumption against the system.

It would be nice to have the basic layer of being able to communicate the need for power or the availability of power generation, and then you would be able to commoditise those solutions. This would be much easier than to create a solution specific for bakeries or greenhouses, for example. Some companies, those with sufficiently large business scale, already connect to the power market directly, but it really depends on what is relevant for each industry.

USEF is currently developing and promoting this framework, how do you envisage the long-term role of the organisation?

Many different parties, public and private, are looking for solid solutions. One thing is clear: for a more sustainable energy system, we need one common standard to effectively unlock the value of flexibility for the energy market. I expect that the USEF foundation will be this standard, shared by the industry and developing over time in a similar way to the GSM association. We hardly notice it, but consider where we started with the GSM framework and now that industry is developing a 5G version while we are still using 3G and 4G.

Markets differ and evolve. USEF provides the framework and we set and guard the standard, which is open to everyone. Together with all users, traditional and new, we will enrich this standard further, adapting to the latest developments and technological standards. The USEF foundation would maintain the whole framework, make sure users know what the actual specifications are of all the latest technology and share best practices.