THE INTERNET OF THINGS AND TRANSACTIONAL ENERGY
Another major transformational trend is the development of the Internet of Things (IoT). It has many faces and applications, for example optimizing supply chains and logistics50 and media (sharing data between different devices etc.). Energy is seen as an important application, especially in unlocking large amounts of small scale flexibility from devices such as heat pumps and electric vehicles. The Internet of Things is about devices communicating with each other. Of course, for the IoT to create value, this communication has to have sensible content, that has meaning to the ‘receiver’. In other words, the IoT devices need to have something in common to talk over. While this value can be derived from the end user (e.g. streaming media, remotely controlled thermostats or an IoT coffee machine connected to the alarm clock), it becomes interesting if this communication becomes more autonomous, such as optimizing logistic chains in the industrial IoT, or indeed exchanging energy and optimizing the power system. Energy use, and especially flexibility in energy use, is something all devices share, and provided it is a scarce resource is an ‘interesting’ topic between devices to communicate. While the relative increase in value of this energy IoT will diminish as more appliances offer flexibility, it still might offer a kick-start to a much wider IoT.
The value of connectivity vs the value of optimization
Totalvalue valueofofthe thenetwork network Total
Internet of Things: Internet of Things: value proportional proportional to Value ton·log(b) n· log(n)
The value of connectivity vs. the value of optimization Added value Added value of of smart energy energy to to the smart Internet of Things the internet of things
Energy optimization:
nnxx
Scaling up networks. As energy is a 'topic' all devices share, its initial value is relatively high. However, as networks grow, its relative value will decline. Contrary to Metcalfe's law51, all devices offer the same thing: flexibility in energy use that can be used to optimize the power system.
Value proportunal Energy opimization: to valuelog(n) proportional to log(n)
Number of connected devices n
Number of connected devices n
Data analytics in the electricity sector ENERGY 47