Coronavirus has drastically changed the cards in play, and for many economic sectors it has changed the rules of the game itself. But rebirth is born out of resilience and collaboration, just like the current revolution in the world of energy.
Emergency. This has been one of the most widely used terms in recent months, and with good reason. And this is typically followed by another: “economic crisis”. These give an accurate representation of the facts: the COVID-19 epidemic is certainly an emergency, and one that first brought the health service to its knees, before generating significant consequences for markets in numerous countries.
Whilst the world is gradually reopening for business and relaunching, it is important to reflect on what the future holds and what this emergency has taught us.
“Emergency” and “crisis”: let’s take these terms as a starting point. In common usage, both of these suggest a sense of urgency, difficulty and alarm. But their etymological origins lead us to deeper and rather different meanings. The term “Emergency” derives from the Latin emergĕre, which in turn comes from mergĕre, “immerse, submerge”, and combined with the prefix “e-” gives the sense “appear, rise to the surface”. Meanwhile, the word “crisis” derives from the equivalent Latin term crisis and the Greek κρίσις, both having the sense of “choice, decision”.
And it is from here that we should re-begin: in a scenario where everything has been turned upside down, now is the time to grasp the opportunities that emerge from the crisis, blocking out the information overdose that bombards us, and decide how to move forward.
The post-COVID-19 reality: a new equilibrium, where nothing has been lost
The laws of thermodynamics have a helpful message: nothing is destroyed, everything changes. Irreversibly. This is how we should view the crisis: an opportunity for transformative change. Society and the economy have altered and will not return to their pre-Coronavirus state. Both will have greater entropy: a new balance with a partial transformation of resources that will have to be reinvented and refined, directed towards a new purpose. This means that what appeared to have been destroyed must be relaunched via new methods and a new form.
We need to view the situation from a different perspective, freed from the chains of a now obsolete system, unsuitable for the new balance that must come. This is the first, fundamental step towards a solution. All sectors of society are reinventing themselves and so are the various economic sectors, some given an advantage by their intangible, digital nature, and others that have to rebuild from the ground up.
Disruption and breaking with the past is an opportunity to rethink future dynamics
But this energy-based metaphor is more than merely a platform for philosophical reflection; it is perfectly aligned with the real changes that we are currently experiencing. The energy sector is undergoing a profound transformation. And what if Coronavirus had never existed? In many ways, this question is irrelevant and leads only to a series of regrets, but it is worth considering for one specific point: in a normal spring, digital energy would have been the topic for discussion, starting with smart grids and Energy Communities.
Digitalisation of energy infrastructure is bringing incremental changes would have been inconceivable just a couple of centuries ago when the photovoltaic effect was first observed. And what was impossible for almost two hundred years is now quickly establishing itself, to the extent that we find the legislation is trying to keep up with development, rather than laws themselves defining change. But social changes often move ahead of legislation, and science and technology are a product of the society that nurtures them.
Energy digitalisation is bringing about a complete paradigm shift in the generation, management and consumption of energy. It is an evolution that could represent a metaphor for the changes necessary to face the economic crisis in the wake of SARS-CoV-2.
These two processes are connected by the concept of disruption: a break from the past, which is not necessarily causally linked to a catastrophic event, but can be, as in the case of this health emergency. From a digital perspective, it has been a natural and gradual progression linked to the introduction of new technologies: the energy sector is a clear example of this. For certain business segments, however, integration of digital technology represents a target that is still a long way off, as is the case for many artisan enterprises.
A break from the status quo following this epidemic has instead been unexpected and unsettling, and extremely far removed from other recent changes. There are many different ways to respond to a crisis, passing through various states of acceptance, but the important thing is not to be overcome, as rebirth is born out of resilience. Already, in the last few months, the textile and manufacturing industries have reinvented themselves to meet health requirements, and every day we see examples in the news of new ways to rethink production.
Cooperation is the new key to interpret events
In this context of renewal, another aspect that is shared with the energy revolution is the importance of the individual’s contribution for the benefit of the community. Over the last two months, we have seen numerous virtuous examples of individuals and groups of people giving support to others, as far as each person’s knowledge and abilities allow, meeting the needs of those in difficulty. Just think of all of the doctors and health workers that have responded to calls from the government on a voluntary basis. Cooperation and sharing of resources by these individuals represent a humanitarian gesture and a gift to the community.
In the world of energy, these values find application in a new model for energy management with the goal of permanently changing the future of consumption, making it sustainable economically, but above all socially and environmentally. This is the goal of the energy revolution. It is the DER (distributed energy resource) model that will allow this change, represented by decentralised resources for the generation of renewable energy, which are no more than local photovoltaic systems, largely residential installations. Governments are analysing how to integrate these resources strategically for the development of each country, as renewables could become an important driver of recovery. State incentives and repayment mechanisms for clean energy input into the national grid are only the start and need to make room for wider-reaching actions. As soon as possible, every country needs clear legislation that defines the contribution of decentralised resources in a more structured way. One positive example is the Australian government, that is developing a solution to meet the need for a decentralised energy-generation model, made essential also by the extreme weather events that the country experiences. The Coronavirus emergency has simply served to accelerate this process for incremental implementation of a DER model.
Cooperation means communities
But distributed generation is not enough: it must be followed up with smart, distributed, decentralised management of energy flows, supporting clean energy. This is enabled and will continue to spread thanks to progressive and widespread introduction of Energy Communities, a democratic approach for access to renewable energy. This is not only because the benefits of moving away from fossil-fuels are experienced collectively, but because anybody can join a community, even if they are unable to install a photovoltaic system.
Regalgrid has also asked itself how it can evolve, embracing the new normal. And we have identified a clear answer: we want to promote this new beginning. How?
First of all, we want to give everybody the option to monitor their consumption and their energy bills. The SNOCU unit is Regalgrid’s solution to move towards a new community characterised by connection and sharing, uniting informed consumers.
We want to increase energy resilience, using our digital platform that favours the creation of a distributed micro-fabric of generation and storage. But above all, our goal is to ensure that everybody can access clean energy. And we hope that clean energy will soon become the primary source, and in an ideal world the only source, for energy consumption.