What is Power as a Service?
Power as a service, also commonly referred to as energy as a service (EaaS), is a business model whereby a client outsources its energy provision needs to a power management solutions expert. As with other service based models such as software as a service (SaaS) or infrastructure as a service (IaaS), the benefit comes from the ability to use a product without having to pay for it outright nor having to deal with the management or maintenance of the service.
In essence, under the power as a service model, the consumer is supplied with electrical equipment tailored to its specific needs on a subscription basis and the service provider is tasked with making sure the system is working effectively.
The Benefits of Power as a Service ?
Upfront-cost savings: As mentioned above, the typical “as-a-service” subscription-based model allows consumers to avoid being burdened with the upfront expense required to pay for their own energy infrastructure and equipment. Also, the infrastructure required can be tailored on a case by case basis according to each individual consumer’s demands, allowing them to only pay for what they need.
Energy savings: Power as a service companies are typically experts in energy provision and management who specialise in advising their clients on where their greatest costs are coming from and where any inefficiencies may lie. Partnering with energy specialists gives consumers access to actionable insights so that they can then make their own data-based decisions on how to improve the efficiency of their power consumption, and thereby save energy. Saving energy also allows users to reduce their carbon footprint – a factor that is becoming increasingly important to more environmentally aware end users. This concept is being taken even further by models such as solar-as-a-service that provide an entirely renewable-energy-based solution at reduced costs.
Off-grid energy provision: Mature storage solutions and the creation of decentralised microgrids can allow energy-as-a-service suppliers to deliver off-grid power to locations that have no access to traditional utility power. Stand-alone systems can be more cost-effective than extending a power connection to the grid and provide energy access to remote locations.
Enhanced data analytics and monitoring capabilities: Energy management specialists can often provide, not only knowledge and expertise in their field, but also advanced technology that can deliver precise data on your current and historical power usage.
Real-time analytics and advanced smart metering technologies can collect data down to the appliance level and tell you, with great precision, which appliances or pieces of equipment are using the most energy and therefore, where further saving opportunities may exist.
Enhanced monitoring capabilities can help to detect abnormal usage patterns by analysing current vs historical data. Real-time detection means that consumers can be alerted to any unusual spike in consumption and take immediate steps to rectify the problem – avoiding any hefty surprise bills in the process.
Benchmarking capabilities can equip a user with comparative data on other similar users so as to help promote greater energy efficiency. Corporate partners can gain energy consumption insights across their entire sector or other sectors and obtain specific guidance on how to reduce costs.
The Impact of Power as a Service on the Sector
The energy-as-a-service business model is proving to be as transformative to the power industry as decarbonisation, decentralisation and digitisation have been.
Personalised services, access to detailed analytics, reduced costs and the potential to lower carbon emissions all add up to make the energy-as-a-service model incredibly compelling to consumers. The additional services on offer, other than the access to power itself, are what make this concept stand out from the traditional utility model.
While the this new business model may be transformative, it does need to be entirely disruptive to traditional power suppliers. As established names in the industry with a historical record of reliable power provision, many traditional utilities may benefit greatly from building partnerships with these new entrants into the market so as to help satisfy the demands of an evolving customer base. Alternatively, traditional utilities will have to dramatically modify the current business model in order to keep up with these impending changes.
One big change that is emerging from the increasing proliferation of power-as-a-service providers is the entrance of big tech players into the market. IoT technologies such as Google Nest are having a direct impact on the sector as smart home devices give consumers greater control and personalised data on their day-to-day consumption. As tech companies increasingly choose to work actively with new market entrants in the energy sector, traditional utilities could be left out in the cold.
The Future of Power as a Service
The future of power as a service is certainly an exciting one with many opportunities arising thanks to the increasing demand for electric vehicles, smart cities and more mature storage solutions. While this new business model may not make its mark without a certain amount of disruption, a business model that gives more control to the end user together with access to more advantageous pricing models is going to be hard to hold back.
The next ten years are likely to produce more changes to the sector than the last 100 as we move towards the ever greater adoption of smart interconnected devices, the expansion of energy efficiency, the development of utility scale storage and the introduction of enhanced data and analytics. Conventional centralised power generation will be obsolete in tomorrow’s smart cities – the future is a clean, interconnected, customer-based system of energy provision. The future is a web of synchronised devices with a digital tier that coordinates and distributes power and and data in real time. Digital models that have transformed other sectors such as transportation and room sharing will be adopted to the energy market.
As costs continue to come down, power is increasingly distributed on a decentralised community-based level, and the introduction of digital platforms escalates, the energy landscape is destined to become more complex. These changes provide significant opportunities for providers able to deliver a comprehensive, cost-saving energy solution to end users.
If you are interested in partnering with an energy-as-a-service provider or learning more about how the conventional energy provision model is being reimagined, check out Power as a Service.