Crisis and prices

The last two years have presented us dramatic challenges in life we thought were not anymore possible in this day and age. The pandemic drove people out of offices into working remotely. And now Russia’s attack into Ukraine messes up world economics and European energy markets.

In the western world we have for used to be untouched by the crises of the world. Our lives have been relatively safe and stable apart from the minor hick ups. Now, however, we are facing a new energy crisis, which will change our lives at least as much as the oil crisis of 1973. The impact of oil crisis was clear on the increased use of other energy sources as well as on the development of energy efficient devices and systems.

Now, 49 years later, we are in the similar situation. Central Europe, who has counted on the constant availability of Russian natural gas, is now forced to find another source. While waiting for the LNG-terminals to be built, electricity will be the fastest replacement, but a steady supply will be a tough nut to crack due to the shutdown of nuclear plants. Therefore electricity will be bought where ever it is available. In Finland the Olkiluoto 3 reactor will reach its full production capacity during the next summer, so at the domestic market the electricity imported from Russia can be replaced.

2022 is and isn’t the new 1973

As with any market with decreasing supply, the prices are bound to raise and be more unstable. Russia’s war in Ukraine will hoist the price of gas, electricity and oil regardless of the compensatory measures. The cost of energy affects to the production and logistics and hence the price of food and other consumables. Also the devastation of Ukraine and blockade of Russia will greatly damage the grain supply of European food industry. Inflation will be set to another level and the consumers’ purchasing power will face hard times. And so we will return to 1973.

Again we are in the situation where consumers as well as industry need to save energy to manage the increasing costs. The lessons from 50 years back about sealing the windows and turning off the lights don’t have great impact on domestic consumption anymore. Instead the increasing amount of new electric appliances, ranging from laundry drying to bicycles and cars increase the amount of electricity used. From 1973 to 2020 the electricity consumption has grown from 29,5 TWh to 81,6 TWh. All the new thingamajigs and apparatuses the green transition brings along have their hands in consumers’ wallet. The consumers therefore need solutions that tell them how much they use electricity and what does it cost, how much energy they consume even when they are not at home, how much they save money by lowering the room temperature and when is the right time to charge the car.

Energy industry

New tools to help us in the crisis

For the utilities and energy companies giving access to this kind of information and these kind of services will reduce the workload of customer service. Explaining the consumers the data in ever-so-cryptic electricity bills will be a trending topic as sums in the monthly bills are like the ones the quarterly bills used to have. These flood of contacts can however be redirected to online services, where the consumers themselves can study the ratio of taxes, tariffs, basic premiums, transfer costs and alike. Comprehensive and accurate information brings on security and gives energy consumers tools to plan the required changes in their way of life.

Just like in the oil crisis in 1973, this current price crisis will cause overreactions but it will also give birth to a permanent and healthy changes. Sure the houses will not be built as tight as bottles to save energy, but the interest and awareness of energy use and distributed production will remain. Apparatus specific and real time metering and reporting in the consumer services are already just behind the corner. The 15-minute imbalance settlement period will be the first step to that direction in 2023.

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By increasing the distributed production the amount of electricity purchased can be reduced. Own production however does not solve all the problems before storing the overproduction becomes cost efficient. Sun does not always shine and the coldest days never have wind. There are days when own production does not work when the need is high. Overproduction itself is not an issue if selling the production to smart grid is made easier. Housing co-operatives, factories, farms and even private houses should cover their roofs with solar panels and use as much as they can of that production and sell the rest to those who need it. Naturally excessive panels without public support funding may increase the investment costs and ROI too much to be feasible. Despite the quantity and quality of the increase in distributed production, the producers need as reliable measuring and reporting as the consumers for scheduling their consumption and sales.

A good consumption reporting service gives both the consumers and producers right information at the right time to support decision making. Are your services ready for current and forthcoming needs?


Check out: EcoReaction and Wapice Smart Energy Services

Energy Services EcoReaction

Author

Juha Heikkinen

Image of post author Juha Heikkinen