From distribution to platforms – fact or fiction?Tomi Yli-Kyyny, CEO
Climate change and digitalisation are transforming the energy industry and society as a whole. Many of our operations are digital and we are increasingly dependent on electricity 24/7, 365 days a year.
A son of a border guard, I was just four years old when we lived at the Kaustajärvi border patrol station in North Karelia. I was too young to understand what would happen when the big boys told me to open a valve and let out the oil from an internal combustion engine generator. The entire border patrol station and the many families living there lost electricity. That was probably the first time I realized that electricity is not to be taken for granted.
Decades have passed since then, yet electricity still cannot be taken for granted. That is because of increasingly destructive extremes of weather. We will see an increase in heavy storms and snowfall that test the durability of electricity networks. This is why the electricity network is taken underground to protect it from the weather. At the same time, the intelligent weatherproof electricity network will lay the foundation for the energy system of the future, in which digital services will increase, transport will be electrified and consumers will become energy producers.
NETWORK COMPANY'S CHANGING ROLE: FROM DISTRIBUTOR TO PLATFORM – WITH CUSTOMER AT THE CORE
Until now, electricity generation was relatively simple and predictable. Big power plants generated electricity and with rising demand, production capacity was increased or electricity was purchased from neighbouring countries. In the future, homes and energy communities will generate an increasing amount of renewable energy and sell the surplus electricity to the network or the energy community. Networks will be increasingly weatherproof. At the same time, the decentralized renewable energy production will be increasingly dependent on weather – that is, in practice, wind and sunshine. The flexibility of production and demand will be the cornerstone of the functionality of the system.
As new actors and operating models emerge, roles need to be redefined: For example, who will be responsible for the electrical safety of energy communities and how are responsibilities, obligations and benefits divided? How is sufficient electricity ensured for customers and who takes care of demand response in accordance with the customer's wishes, that is, controls electrical devices and car battery charging? Energy storages bring flexibility to customers, society and network owners.
In the future, electricity distribution companies will become platforms that monitor and regulate electricity use and distribute the electricity generated. The electricity market will move towards sharing economy where the rules of the game are totally different. The roles of actors will change and we must have the courage to change them.
Still, there is something familiar with the future model where every house can also be a power plant. Back in the day, the Kaustajärvi border patrol station built its own power plant because it was outside of the electricity network. The current network must be upgraded to meet the needs of the new millennium, and therefore it has to be modernised – just like our own attitudes towards electricity use and production.
Tomi Yli-Kyyny, CEO