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Understand the Clean Energy Package (CEP) and Its Impact on Utilities

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Frederik ten Sythoff's picture
VP Marketing Communications Greenbird Integration Technology

Utilities worldwide are starting to recognise the need to become a platformed utility that can innovate rapidly and offer new services quickly. At Greenbird, I can fulfil my ambition to help...

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  • Mar 16, 2020

In 2019, the EU completed the final step of the Clean Energy For All Europeans Package (CEP) which is aimed at improving sustainability efforts.

What does this mean for utilities and how can they play a part in making the directive a success?

Understanding the Clean Energy Package (CEP)

The Clean Energy Package is a framework proposed by the EU to steer energy companies towards cleaner, more sustainable operations. To achieve this objective, the CEP has proposed multiple directives and guidelines to facilitate new business models and revamped energy legislation.

The eight core directives of the latest CEP agreement (which can be read in detail here) are:

  • Energy Performance of Buildings Directive (EU) 2018/844
  • Renewable Energy Directive (EU) 2018/2001
  • Energy Efficiency Directive (EU) 2018/2002
  • Governance of the Energy Union and Climate Action Regulation (EU) 2018/1999
  • Electricity Regulation (EU) 2019/943
  • Electricity Directive (EU) 2019/944
  • Regulation on Risk-Preparedness in the Electricity Sector (EU) 2019/941
  • Regulation on the European Union Agency for the Cooperation of Energy Regulators (EU) 2019/942

A key point of the CEP is to empower consumers and give them more control over their personal data, in addition to providing better protection to vulnerable customers. This is in line with the Energy Union, a policy brought forward by the European Commission to improve access to clean, sustainable, and affordable energy.

The CEP will help the EU meet its climate targets along with satisfying goals defined in other sustainability directives, including the Paris Agreement. This will create a future where utilities, consumers, and other relevant parties thrive together in a clean and sustainable environment, inching the EU closer to its target of 20% renewable energy usage by 2020.

The share of energy renewable shares among EU countries (Image Source).

How Will This Impact Utilities?

To comply with the CEP, Article 23 suggests utilities must disclose necessary energy data to consumers at no cost and make it easy for them to access the information. This rule does not only affect TSOs and DSOs, but also aggregators, service companies, or any organizations that provide energy services to the market.

Utilities must ensure sensitive data is managed the right way, in line with EU data protection regulations. Consumer contracts should include what data is to be shared and in what way. Any data shared with third parties can only go ahead with the explicit consent of consumers regardless of how trivial the shared information is.

Article 24 also encourages utilities to improve interoperability with other energy companies and providers—think of it as groups of national datahubs working with each other for the common good. This is achieved through agreed-upon interoperability requirements and non-discriminatory procedures based on current national practices adopted by member states of the EU.

The rule was proposed to promote healthy competition and combat unreasonable administrative fees, thus preventing monopolies. It also lowers the barrier to entry for new market participants—including startups and organizations entering a new region—which further encourages competition and innovation.

Competitive markets are great for consumers because prices are naturally regulated. The CEP does allow exemptions for special scenarios, however. Of course, utilities benefit as well from competition. Ambitious rivals will push each other in pursuit of business advantages, leading to inventive solutions that benefit the industry as a whole.

These changes leave two questions to be answered by utilities. How can they meet the directive suggested for the CEP’s data revolution in the most efficient and cost-effective manner possible? At the same time, how can utilities learn and make more sense of their tremendous volumes of data?

The Link Between the CEP and Utility Data

Utilities have no problems collecting data. The problem is, they don’t understand what to do with it. As much as 80% of valuable data is underutilized due to cumbersome data integrations and legacy system silos. ‘Dark data’ is a major concern in utilities and it’s severely impacting their ability to meet the CEP goals. These problems hinder not only business performance, but also slow down sustainability efforts.

By eliminating the challenges associated with IoT, legacy systems, secure IT/OT integration  utilities can finally put data to optimum use in their business processes to accelerate innovation.

We are staunch supporters of the CEP and sustainable development in general, and we want to help utilities achieve the goals outlined in the package to create a clean, sustainable future.

Frederik ten Sythoff's picture
Thank Frederik for the Post!
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Matt Chester's picture
Matt Chester on Mar 16, 2020

Thanks for sharing, Frederik. Are there any particular areas you think the CEP didn't go far enough and you wish more was done?

Frederik ten Sythoff's picture
Frederik ten Sythoff on Mar 17, 2020

There are a number of data-driven examples I can think of but let's take one;  potential barrier for the aggregator. In the near future, aggregators are likely to play an important role as enablers for decentralized market actors like consumers, prosumers, active customers and energy communities. With the help of aggregation, it will be possible to reduce prices on control reserves and wholesale markets by combining several different units and optimising their demand and supply behaviours. For consumers and prosumers participating in aggregation services, it will have the potential to lower balancing costs and decrease the energy bill. Further, the aggregator can take the role of the intermediary between decentralised actors and the market and can help small actors like renewable self-consumers, active customers, or small businesses to participate in the electricity market. Although there are many opportunities for aggregation business models, there are also various barriers. Market access, local settlement and the access to or exchange of data with eligable parties. As it stands now each member state can still define who is eligble, restricting market access. I hope there will be more focus on making data available to eligible market participants in all member states that will allow the innovation we so desperately need quickly to reach the goals.

Matt Chester's picture
Matt Chester on Mar 17, 2020

Thanks for the follow-up and insights, Frederik! Hopefully in the next steps, your guidance and suggestions are taken into account

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