Introduction to Smart Energy and Energy Cloud Platforms

Introduction to Smart Energy and Energy Cloud Platforms

In smart energy solutions, the energy cloud platform plays the role of overall management. It enables real-time monitoring and dispatching among different forms of energy, energy consumption analysis, and more, helping solve the problem of rational energy utilization across an entire region.

1. Definition of Smart Energy

Smart energy refers to the application of next-generation information technologies such as the Internet to conduct real-time monitoring and analysis of energy production, storage, transmission, and usage. Based on big data and cloud computing, it performs real-time monitoring, reporting, and optimization to form an integrated energy management system that is optimal, open and transparent, decentralized, and widely supported through voluntary participation from enterprises, research institutions, universities, and society at large. Through this integrated management system, a new form of energy production and utilization can be achieved. The smart energy industry is a revolutionary and innovative industry jointly built by multiple sectors. It not only features systemic integration, safety, cleanliness, and economic efficiency, but also has enormous future growth potential. It is an upgraded version of traditional energy and its related industries.

In 2009, the international academic community, including IBM experts, proposed that interconnected technologies would change the way the entire human world operates, affecting the work and lives of billions of people. As a result, the idea of building a "Smarter Planet" was introduced, along with concepts such as smart airports, smart banking, smart railways, smart cities, smart power, smart grids, and smarter energy. The vision was to form an "Internet of Things" through universal connectivity, and then integrate it through supercomputers and cloud computing, enabling humanity to manage production and daily life in a more refined and dynamic way, ultimately achieving a globally "smart" state—"Internet + Internet of Things = Smarter Planet." In the same year, some Chinese experts and scholars published works such as When Energy Becomes Intelligent and Smart Energy and the Progress of Human Civilization, which drew industry attention to smart energy. From that point on, the concept of smarter energy formally entered China.

In March 2016, the National Development and Reform Commission, the National Energy Administration, and the Ministry of Industry and Information Technology jointly issued the Guiding Opinions on Promoting the Development of “Internet Plus” Smart Energy. The document stated that smart energy is a new development model for the energy industry that closely integrates energy production, transmission, storage, and consumption with the Internet. It is characterized by intelligent equipment, multi-energy coordination, information symmetry, decentralized supply and demand, and open trading.

1.1 Energy Is the Carrier of Smart Energy

Whether in development and utilization technologies or in production and consumption systems, the object and carrier of our research is always energy. The purpose of our persistent exploration is to find safer, more sufficient, and cleaner energy, so as to make human life happier, goods and services more affordable and higher in quality, the scope of human activity broader and deeper, and the ecological environment more livable and beautiful.

1.2 Institutions Are the Guarantee of Smart Energy

Smart energy will bring about a new energy landscape, which inevitably requires corresponding advanced institutions that encourage technological innovation, optimize industrial organization, advocate energy conservation, and promote international cooperation. These institutions provide the guarantees needed to ensure the stable operation and rapid development of the smart energy system.

1.3 Technology Is the Driving Force of Smart Energy

Technological innovations such as the steam engine, internal combustion engine, and gas turbine formed the foundation of industrial civilization. Likewise, the development of smart energy also requires technological advancement. The technologies for developing and utilizing nuclear energy, solar and wind energy, biomass energy, and other forms of energy—whether already in use, under early exploration, or not yet invented—will certainly provide tremendous momentum for the development of smart energy.

1.4 Wisdom Is the Essence of Smart Energy

Wisdom is the ability to understand, analyze, judge, handle, and innovate regarding things. Wisdom differs from intellect: intellect mainly refers to the level of human cognitive and practical capability. Wisdom also differs from intelligence: intelligence mainly refers to strategy and talent, leaning more toward specific behavior, capability, and technology. The wisdom in smart energy is reflected not only in innovation in energy development and utilization technologies, but also in reforms to systems of energy production and consumption.

1.5 Framework of the Smart Energy Industry Structure

2. Origins of the Energy Internet

As early as 2000, Nobel laureate in economics Joseph Stiglitz asserted that two major events would shape humanity in the 21st century: one was the new technological revolution led by the United States, represented by the Internet and new energy; the other was China’s urbanization movement.

By 2020, 60% of China’s population would be living in cities. The urbanization process has generated tremendous momentum for energy consumption, with the correlation coefficient between the logarithms of urbanization rate and energy consumption reaching 0.96. China’s total energy consumption was projected to reach 5 billion tons of standard coal equivalent by 2020. The rapid development of urbanization is bound to cause an energy supply crisis. Therefore, under the new energy landscape, we are compelled to adopt smart and energy-saving modes of energy production and consumption to replace traditional ones.

With the upgrading and transformation of industrial structures under the country’s new urbanization strategy, many newly built urban areas—including industrial parks, technology cities, and commercial and financial districts—have shifted their development focus toward modern services and advanced manufacturing. The high-temperature, high-pressure, high-grade energy demand of the industrial era is gradually transforming into the low-temperature, low-pressure, low-grade energy demand of the post-industrial era. At the same time, urban residential energy demand for daily life continues to grow, and more and more people are seeking healthy and comfortable indoor building environments. As a result, the forms of energy application have changed significantly. Energy is now used mainly to support building environments through lighting, heating, cooling, hot water supply, and steam supply, and urban energy consumption is undergoing rapid and profound changes.

As the Internet era fully arrives, the Internet’s connectivity, interaction, collaboration, and intelligence make "everything possible," unleashing unprecedented potential in the traditional energy industry. The year 2015 was regarded as the first year of the Energy Internet. At the 5th International Smart Energy Summit, many authoritative experts in global energy internet and smart energy gathered together to discuss the theme of "Opening a New Era of the Energy Internet." They explored how the energy industry could become internet-enabled under the broader context of the energy revolution, and how to address the integration of the Internet and the energy industry during the development of smart energy. The summit put forward the promising vision of "Internet + Energy."

In recent years, with the deterioration of air quality in China, terms closely related to the environment—such as "PM2.5" and "APEC Blue"—have increasingly entered people’s daily lives. Energy and the environment have therefore drawn growing attention. With the rapid development of ICT and Internet technologies, a brand-new path has emerged for addressing current environmental and energy utilization problems: the Energy Internet. By leveraging the Internet’s four major advantages—openness, real-time capability, data orientation, and scalability—the energy industry can be transformed through digitalization. Energy can be endowed with new data attributes, and Internet technologies such as IPv6, big data, and cloud computing can be used to dynamically allocate energy production, transmission, and consumption, thereby improving efficiency, conserving energy, and reducing emissions. The Energy Internet will affect all sectors of society and give rise to new models, new services, and new business forms.

3. Development of the Energy Internet

The development of the Energy Internet will go through a process from an initial stage centered on "energy" to an intermediate stage centered on "information."

The initial stage of the Energy Internet is mainly energy-driven. Triggered by power sector reform, it progresses from pilot programs for direct power purchases by large users to day-ahead trading, achieves the separation of power distribution and retail sales, and at the same time builds active distribution networks and supporting facilities integrated with microgrids and renewable power generation. Ultimately, this leads to a pattern in which distributed generation fully participates in electricity trading.

The intermediate stage of the Energy Internet transitions from energy-led to information-led. Based on the extensive application of the Internet of Things, big data, and cloud computing technologies, this stage features an intermediate Energy Internet with characteristics of artificial intelligence.

In addition to the large-scale application of information technology, the intermediate stage also depends on the establishment of open trading markets for electricity, gas, and other forms of energy across society, as well as markets for constrained indicators such as carbon emissions and energy-saving quotas. Combined with standardized and personalized service models tailored to various user needs, these markets will become widespread.

From the perspective of overall industry trends, this has been discussed at the macro level. But from the perspective of practitioners across the entire Energy Internet industry chain, the shift must be from "what can I do" to "what do users want"—that is, from indirect, single-purpose energy supply or equipment and technical services to the provision of integrated energy services.

4. Profit Models and Core Competitiveness of the Energy Internet

First, there are potential revenue sources, including land appreciation and energy procurement. Second, there are core services, including integrated energy services and package design. Third, there are basic services, namely energy production, including power generation, distribution, and consumption. Fourth, there are value-added services, including engineering services and asset services. The integrated energy services of a regional Energy Internet can be viewed as a form of energy hosting model.

5. Overview of the Smart Energy Cloud Platform

The smart energy cloud platform uses a large number of application software systems, control components, gateways, smart energy management and control platforms, and energy-saving and emission-reduction control systems. Based on the IEEE 1888 international standard for smart energy, it conducts real-time monitoring and visualized management of energy production and consumption, carries out data analysis, implements risk management and health diagnostics, and promotes improved energy efficiency, reduced emissions, and low-carbon management. The platform is built using the latest Internet technologies such as IPv6, SDN, OpenStack, and HTML5. It breaks down data barriers in the energy sector and enables interconnection and information sharing, thereby reducing the waste of data resources, preventing fraud, and avoiding human interference. By mining real, reliable data on energy production and consumption, it can provide direct services to various energy producers and consumers nationwide, and even to households, while also creating the conditions for governments to procure third-party services. The establishment of a smart energy cloud platform is an important step toward launching the Energy Internet.

6. Conclusion

From Germany’s "Industry 4.0" initiative, the United States’ industrial Internet and big data national strategies, and the European Union’s "Horizon 2020" program to China’s "Made in China 2025" strategy, countries around the world are developing strategies to seize the high ground in a new wave of industrial transformation. As the world’s largest producer and consumer of energy, China’s move toward digitization and intelligence in energy production and consumption is inevitable.

China is a major global producer and consumer of energy, but it also faces serious challenges such as poor energy resource endowment, insufficient high-quality energy, lagging new energy technologies, low efficiency of energy use, excessive carbon emissions, and ecological degradation. But challenges also bring opportunities. With the rapid development of ICT and Internet technologies, the traditional modes of energy production and consumption are bound to undergo fundamental transformation. With the innovative development of the smart energy industry, an industrial Internet led by energy will surely emerge, providing support for the key goals of improving energy efficiency and reducing carbon emissions.