On June 26 there will be held XI International Conference NEUF 2015 at the Polish Ministry of Economy. This year the theme of the meeting is “The transformation of the Polish economy through energy and industry – efficiency, productivity, social dialogue”
We are talking with Grzegorz Onichimowski, EnerNOC representative and Grzegorz Nowaczewski, CEO of Virtual Power Plant who are participating in panel discussions during the conference.
The need for change in the energy industry is often pointed out in public debates as an important factor in further Polish economic development . Why is it so important?
GN: Energy industry is an example of this part of our economy in which we are strongly lagging behind in relation to the countries of Western Europe and especially the United States. For example – the average unit cost of electricity for energy consumers in the category of SME’s (small and medium enterprises) is among the highest in Europe. Polish energy companies do not actively manage a portfolio of services that would reward the consumers who adapt their consumption during the day to the signals from the so-called energy market.
The energy efficiency of commercial buildings remains weak. Energy efficiency is nothing more than consumption of only the amount of energy that is needed to meet the specific daily needs. Of course, every year the situation is improving and our businesses are managing their energy better and better, but still, these changes are too slow.
What can you do to make this situation change for the better faster?
GO: Paradoxically, the current situation may be a chance for faster qualitative changes. We are witnessing a quiet energy revolution, perhaps the first in this scale for over 100 years. Instead of a centrally controlled system of large power plants giving us electricity from coal or gas, it creates a much more complicated system of distributed energy, renewables and co-generation, where the roles of supplier and consumer are sometimes smooth, sometimes they change roles. Innovation in generation (production) of energy are accompanied by innovation in energy transmission and distribution – smart grids and metering and innovations in managing this whole complicated mechanism, even in the form of software that’s giving a kind of “energy intelligence” for our factories, buildings, households. In a situation where Poland must rebuild its energy system anyway, we should immediately use a shortcut and follow the best examples.
GN: It’s true. Investment in the latest technologies allowing for efficient production of energy and its rational use may be relatively higher profitable in Poland than in Western countries, which have been using optimisation technologies for a long time.
However, the condition for implementing effective changes is their innovation. We cannot easily copy technologies used by our foreign partners, because that way we will not reduce the distance in technology that separates us from them. It is worth to bet on innovations, which will strengthen specific areas of our economy in specific companies. It is therefore important to develop harmonious cooperation between entrepreneurs and scientists, combining creativity and knowledge of scientists with business skills of entrepreneurs. I can see here a great challenge for the active policy of the state, which should create a legal framework and incentives for such cooperation.
Or maybe renewable energy is an opportunity for our economy?
GN: I’m an enthusiast of distributed energy. However, our national power demand is met by power stations and this situation will not change for many years. Power from microgeneration systems, such as small wind turbines or photovoltaic, looks pale in comparison with the overall needs of the national power systems. In addition, it is probable that Polish distribution system managed at the level of distribution system operators will not be able to wisely manage the electricity generated from distributed energy sources of low power for a long time.
GO: I’m not so cautious. Advanced processes to create a joint energy market will create a situation where the electricity generated by German windmills becomes very competitive with energy from thermal power stations. This will force change for our companies to new, more innovative approach and to create a distributed resource management systems – including those that are at the disposal of consumers.
GN: And I hope that the increasing prosumer pressure will enable us to conceive rational scenarios for the development of this part of energy industry funded by the money that flows from Brussels before 2020.
EU funds as a lifeline for the Polish energy industry?
GN: Of course it is and not only in scope of renewable energy but also in the more traditional approach to energy. However, there is one condition, that we don’t treat the European funds as an extra injection of cash for current operations of enterprises but as an investment in innovations, that allow us to respond to the specific needs of consumers, to win new markets at home and abroad and to build a strong brand for innovative product, and thereby for the company that makes it.
GO: I can also see such opportunity. Global innovative energy companies such as EnerNOC are looking for good solutions. Products and services created in Poland can be introduced to the global market by creating cooperation between Polish start-ups with such players – first locally and then at European or global level. Our energy companies do not give such opportunity because their presence on the global market is scant.
During the NEUF 2015 conference there will be a discussion not only about efficiency in energy production but also about its economical consumption. The company managed by Mr Nowaczewski specializes in providing DSR solutions, which allow for considerable savings in energy consumption. How those solutions work?
GN: To simplify, DSR services, by which we mean Demand Side Response, rely on conscious momentary power reduction by consumers and shifting part of their demand outside the daily peaks of energy consumption – in response to price signals from the energy market. The best way to shift the consumption is to carry it out in automatic mode, which adjusts energy consumption to the current load of the building and to other parameters such as short-term weather forecasts.
So far, such services were available mainly for large energy consumers, industry for example. With the development of internet technologies and the Internet of Things – it is currently commercially reasonable to implement DSR in smaller and distributed facilities such as shopping malls, movie theatres, sports facilities. Their use brings tangible financial benefits to the owner and the economy benefits from the lower demand for energy.
GO: EnerNOC, the world’s largest company specializing in demand response and energy efficiency wants to enter the Polish market not only to bring their solutions here and monetize them. We hope that through cooperation with such companies as VPP we can develop solutions that are unique here and maybe transfer them to other markets. Demand response can give second wind to the energy industry, cut energy costs for consumers and become, in certain area, Polish speciality so to speak and without harm to the traditional sources. This is the opportunity about which we want to talk about during the NEUF conference.