Article by Leonor Ruiz (Soulsight), Carmen Valor (IIT-Universidad Pontificia Comillas) and Valeria Moreno (IIT-Universidad Pontificia Comillas)

The third generation of energy customers: flexumers

The decarbonization of the energy industry demands a growing intake of renewable energy generation and integration. These energies are less carbon-intensive but have a fundamental disadvantage: they are intermittent. If the energy supply is intermittent, energy demand must be flexible: our energy consumption must adapt to the times when renewable production is greatest.

This requirement of flexibility is a fundamental shift in how consumers understand and use energy. We can speak of a third generation of energy users. The first generation was the sole consumer of energy. The second generation brought the prosumer, users who produce and consume their energy. We are witnessing the third generation of users: the flexumer, or a user that purposely adapts her energy consumption to match the grid’s needs. Flexibility provision can include actions like shifting the use of certain appliances or suspending the use of energy at a given time or allocating the self-produced energy to other users.

Although time-of-use tariffs have tried to encourage this role change, a wider use of incentive-based flexibility programs is expected in the future. In these programs, consumers provide flexibility in response to signals: the system sends an alert so that they increase (or reduce) consumption, and consumers that appropriately respond to this signal will be given in exchange some rewards.

The provision of flexibility requires that consumers willingly and actively participate in these programs. Understanding what motivates consumers to participate and the barriers that thwart their participation is essential to devise strategies to ensure consumer engagement with these programs. Consumers enter service exchanges when they anticipate achieving some form of value or gain, and this expected value compensates for the anticipated pains. In BeFlexible, we have interviewed potential consumers in three countries (France, Italy, and Spain) to understand what forms of value these consumers seek in flexibility provision. This understanding will help energy actors develop value propositions and engagement strategies to ensure their participation in flexibility programs.

Value sought in flexibility programs

Although intuitively, we may think that savings or economic value is the dominant form of value sought by users, our research showed that consumers anticipate many forms of value in flexibility provision, such as efficiency, environmental, comfort, convenience, episteme, status and social value.

Although efficiency can also produce savings, consumers seek, first and foremost, to avoid waste and make an intelligent consumption of energy. They are growingly aware that energy is impactful, and they try to prevent leaks or optimise energy use with their home appliances. Integrated management of energy that can make the most of their produced or consumed energy is a form of value that motivates them to participate in flexibility programs.

Related to this, environmental value is a crucial type of value sought by consumers. Reducing emissions and using energy with a lesser environmental footprint is an essential motive for participating in these programs. Moreover, some consumers report being self-sufficient and not reliant on traditional energy operators as a fundamental benefit sought.

Comfort is a form of experiential value mentioned by almost all users. Heating and cooling are two uses of energy that enable their perceived comfort. This form of value is so important for consumers that they are not willing to trade it off for participating in energy flexibility activities or changing habits. Ensuring comfort and control over comfort is necessary to entice participation in flexibility programs. Comfort goes beyond a hedonic perception, as for many consumers, it is a symbol of caring practices: a comfort temperature is instrumental to ensuring the health and safety of the family. Comfort is related to this notion of intelligent consumption: for some consumers, it is high time to rethink our comfort standards and lower comfort temperatures: “We don’t have to be in T-shirts in Winter”, said one of the informants.

Convenience emerges as another form of value that consumers are not willing to compromise: their provision of flexibility cannot entail stress or uncertainty. Anticipation of future negative emotions is one of the main barriers to participating in flexibility programs.

Another potential form of value associated with flexibility provision is episteme value. This reflects the value related to learning about energy and energy consumption. By participating in flexibility programs, consumers can understand how energy markets work, how they can optimise their consumption by shifting times of appliance use or how they can use appliances and devices smartly. Acquiring this knowledge is a motivation to participate in these programs despite the difficulties anticipated in acquiring this knowledge.

Gaining status or being admired by others is another form of value that motivates participation in flexibility programs. Involvement in some flexibility programs requires that users possess electrical assets such as Electric Vehicles or solar panels. The investment necessary explains why users with these assets are regarded as high-status users. Also, being an example for others in the energy transition or being an early adopter mobilises pride in users and admiration in others. These anticipated emotions are also a form of value leading to a greater willingness to participate.

Finally, consumers report that creating social value is an essential motive for participation. Social value is created when users feel they are part of something bigger than themselves; this generally occurs by improving the welfare of their communities or by making them more resilient and self-sufficient. Although community can be defined differently (my condominium, my neighbourhood or my town), improving livelihoods directs participation in flexibility programs.

Concluding remarks

Understanding the manifold forms of value consumers anticipate in flexibility programs will allow energy actors to devise compelling value propositions aligned with consumers’ expectations. They can also be used for segmentation and clustering as consumers differ in the importance attached to each form of value. Our work provides valuable insights for business model development, product/service definition and engagement strategy proposals.

This article summarizes key takeaways from Deliverable 2.1, titled “Value Propositions for Market Actors.” To access the complete document, please click here.

 

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Article by Fernando David Martín Utrilla, BeFlexible project coordinator from i-DE (Iberdrola Group)

The use of flexibility for electricity networks is currently of utmost relevance in the European energy agenda. In BeFlexible project we are aware of the importance of unlocking the potential flexibility of the distributed energy resources to provide value for DSOs and  customers.

High-level European Commission policies like the European Green Deal, Fitfor55 and the most recent REPowerEU stress the need to develop efficient mechanisms to deploy a more flexible use of energy across Europe, and particularly in electricity networks.

European policies and the call for a more flexible energy use

It is clear that the energy transition does not need innovation as usual. It is not about implementing a new technology that brings advantages for the system, but about carrying out a big transformation in  grid operation and planning processes. i-DE, Iberdola Spanish distribution company, have made a long journey to be able to assess the scalability and the feasibility of the flexibility solutions and the transformations that are needed.

So far, i-DE projects experience has brought us to a better position to understand what may come, and to help to propose regulatory needs. In the technological context, many barriers were already tackled. But in the regulatory context, we started from scratch.

In this journey, we needed to explore firstly all possible scenarios to see how this transformation could affect our processes, share experiences with other countries and keep the alignment with Europe.

That is the vision with which we faced the CoordiNet project. In this project, which ended in 2022, TSO/DSO coordination was successfully addressed. It considered different coordination schemes, the concerns of both operators and the necessary exchanges of information between them.

However, local flexibility markets for medium and low voltage networks, which are also important for us (DSOs) needed further study.

Advancing local flexibility markets

For this reason, then, in the OneNet project, that concludes at the end of this year, the approach of the Pilot was focused on the local market in the Spanish demo. The wholesale market operator is participating with us and a prototype for the local market has been developed very much in line with what was developed in the United Kingdom in terms of flexibility products for the short and long term congestion management needs.

Even all this we are testing has a basis in the needs of the networks, we cannot forget that at the center of everything is the customer.

And that is exactly the BeFlexible project approach. It is a four-year project that we started a few months ago, in September 2022.

BeFlexible’s Kick Off Meeting in September 2022

Putting customers at the center: BeFlexible project’s approach to incentivizing flexible solutions

The incentives for the consumers and generators are the key to the success of flexible solutions. And these incentives must be based on how solution implementation affect them.

That is why in BeFlexible we have moved the focus to what is on the other side of the markets. We are working on finding a way to have liquidity in the flexibility markets based on New Regulation, on Platforms, on Customer strategies and on the Services Ecosystem (both for system operators and for customers).

The new regulation has to define very clearly the roles of all the actors involved. Not only the new responsibilities of DSO as system operator of the distribution network, but also the responsibilities of the aggregators, flexibility providers, and other new roles that emerge such as energy communities, charging point operators, generators, suppliers, etc.

Building a regulatory framework, platforms, and service ecosystem for flexible solutions

Regarding Platforms, a proper information exchange among system operators, flexibility providers and aggregators is necessary. A grid data and business network platform (GDBN) will be developed to facilitate an adequate exchange of information for the whole value chain.

Our objective is also to ensure that there is a relevant offer to each market actor to be involved into a flexibility solution with the definition of meaningful easier-to adopt value propositions on which business models can be based. A plan to engage customers from the beginning has been defined, considering the recruiting, onboarding and servicing challenges with the proposition of customer engagement strategies.

And last but not least, the definition and adaptation of a service ecosystem offering a broad portfolio of flexibility and cross-sector solutions for end-users will be carried out.

Hopefully, we will be able to reach the end of the project with a much certain scenario on the applicability and usefulness of flexibility services, since with this new approach the needs and expectations of all actors involved are being addressed. With the development of regulatory sandboxes in parallel with the BeFlexible project we will be able to finish designing the new scenario of the flexible network required by the energy transition and European regulation.

 

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The energy industry has historically been male dominated, but in recent years, there has been a notable increase in the number of women working in the sector. Despite this progress, women still make up a relatively small percentage of the workforce, accounting for only 22% in oil and gas and 32% in renewable energy, according to the International Renewable Energy Agency (IRENA). The numbers for management levels are even lower.

The Importance of Gender Diversity

This underrepresentation can be attributed to various factors, including unconscious bias, lack of female role models, and limited diversity in recruitment processes. Countries in the European Union are transitioning ambitiously to clean and renewable energy and will require innovative solutions and new business models. Greater participation from a diverse talent pool for both jobs and decision-making will be essential for success.

BeFlexible project is committed to challenging gender stereotypes and promoting diversity, with a strong representation of women in the project. Of the 138 people involved in the consortium from different countries, 60% are men and 40% are women, making it a significantly more diverse group than the energy sector as a whole. Regarding leadership, from 9 work packages, 6 are led by women and 3 are led by men.

Moreover, BeFlexible has taken a significant step towards ensuring gender-inclusive practices by creating a Gender Action Plan (Deliverable 9.5). This plan aligns with the broader European strategy of promoting gender practices to achieve our equal transition goals. A Gender Action Plan is a crucial tool that promotes gender-inclusive design and implementation of practices and solutions while raising awareness of the Gender Equality strategy guidelines and objectives set by the European Union. With the implementation of this plan, the BeFlexible project can ensure that gender perspectives are integrated into every aspect of the project development, making it more equitable and inclusive.

Supporting Women in Energy

On the International Women Day, we want to recognize the significance of inspiring girls and women to pursue careers in science, technology, engineering, and mathematics (STEM) and to work towards removing any barriers to participation.

The energy industry is taking steps to promote diversity and inclusion in the workplace, including initiatives to attract and retain more women in the sector, mentoring and leadership programs, and promoting flexible working arrangements. The European Commission has launched several initiatives to improve gender balance in the energy sector, such as the Equality platform for the energy sector. The platform aims at strengthening the commitment to equality in all its dimensions, notably by promoting workplaces that are more diverse and inclusive. It functions as a forum to discuss equality-related issues and share concrete actions that contribute to achieving equality in the energy sector.

Furthermore, Women of Renewable Industries and Sustainable Energy (WRISE) and Women in Energy (WONY) are two non-profit associations that support the education, professional development, and advancement of women in the energy sector. These initiatives seek to foster professionalism, integrity, ethics, inclusion, diversity, and growth and development of the next generation of women leaders, executives, and professionals in the energy industry.

Benefits of Diversity

Increasing diversity in the workplace not only creates a more equitable and inclusive environment but also brings different perspectives, experiences, and skills to the workforce. Women in energy are making significant contributions to the sector, and it is important that the industry continues to support and empower them to reach their full potential. With initiatives and organizations promoting gender diversity and inclusion, the energy sector can be more sustainable and successful in the future.