Internet of Energy, digitalization and the circular economy


The circular economy concept requires that any resource is optimized in terms of renewability (energy used), reusability (cycling valuable metals, alloys and polymers beyond the shelf life of individual resources) and recyclability (compostable packaging). Within the energy sector, the circular economy would be powered by an "Internet of Energy" shaped by the imperative of decarbonisation (supported by transitioning sectors that today rely heavily on fossil fuels, such as heat and transport, to electricity-based power). The Internet of Energy would feature distributed generation with a high share of renewable energy, empowered by storage in all forms (grid, behind-the-meter and electric vehicles), demand response supported by smart grid assets down to "white goods"--and a fully transparent cost and value structure that takes into account levelized cost of energy (LCoE), cost of externalities, time and location of generation, value of ancillary services and storage, opportunity cost, etc. A suitable setup for an Internet of Energy could be a centralized electricity system with large-scale renewables, storage and flexible backup power interconnected to a decentralized electricity system with distributed generation, combined heat and power, electric vehicles, smart white goods, etc.