Digital platforms can bring supply and demand together. In the energy sector, they can help manage the increasingly complex energy system. As part of the energy transition, electricity is increasingly generated in a decentralized manner by wind turbines, photovoltaic systems, or local combined heat and power (CHP) plants. On the other hand, demand is also becoming more decentralized and possibly also more flexible, through, for example, electric vehicles or batteries.
At the same time, digital metering and control technology makes the increasing complexity visible. In this way, individual components can be controlled. Today, applications such as modern heating and air-conditioning systems or charging stations for electric cars can already be managed digitally. In the future, digital platforms can also play an important role by bringing supply and demand together and operating systems in a coordinated manner.
Market-based approaches reflect local scarcity or overproduction through prices. Unlike centralized power exchanges, they allow supply and demand to be matched both spatially and temporally, taking individual preferences into account. This means consumers only pay as much as the capacity is worth at a given time and place. There have already been initial pilot projects in Wuppertal, Switzerland, and Brooklyn.
Platform-based digital markets can either function as a local power exchange (“clearinghouse”) or have a completely decentralized structure. The latter is called peer-to-peer markets – meaning “like-minded people” trade among themselves. One example is blockchain combined with “smart contracts”: End-users, producers, and prosumers, who both generate and consume electricity, for example, via photovoltaic systems, can communicate and trade electricity safely even without central exchanges.
However, such mechanisms only work when applications are automated. For example, automated forecasting and control models based on artificial intelligence make real-time decisions and implement them independently. In this context, there is room for innovative solutions and business models (“analytics as a service,” “software as a service,” for example, integrated and automated trading and control solutions). The charging cycles for electric cars, e.g., can be controlled fully automatically via smart-charging applications, based on price signals and individual preferences.