Pinsent Masons energy lawyer Peter Feehan explains how big data is key to tackling the challenges of an energy sector that is in almost constant flux. By Kelvin Ross
As a partner specializing in emerging energy and greentech markets at international law firm Pinsent Masons, Peter Feehan has a bird’s eye view of the changes that are sweeping the energy sector.
He and his colleagues are helping power and utility companies adapt to the blurring of lines between the traditional energy arena and an increasing number of so-called disruptors.
“The energy sector has never been more exciting,” Feehan tells me. “We are seeing a very changing landscape across all the sectors that form the energy environment. There is a real shift in terms of dynamics. In conventional power, it’s moved from efficiency of kit to looking at how quickly machinery can be started.”
He explains that this need for speed has come about “as a result of the way that we are utilizing power. People are more immediate now in their power demands. It’s not about baseload now – it’s about how companies can respond to price signals.”
He says there is no “predefined shape around the usage of power” – it’s more localized. “A lot of the power now is at a more distributed and localized level. There’s a changing landscape in how we are using power and there’s a changing landscape around where that power is generated. And there are changing demand profiles as well. So somehow all generators, infrastructure providers and energy suppliers have got to respond to that.”
He says that how companies plan a strategy for that response depends on the size of the company. “Each of those market segments that make up the energy sector are trying to respond in the best way that they can. What we are finding is that the pace of that change is very rapid, and the ability to respond to those market changes is difficult at times, given the size of some companies that need to maintain shareholder value and investor confidence.
“Given that some of the larger players in the power market can’t move as quickly as some of the disruptors, we are seeing a convergence in the marketplace between the energy sector and the tech sectors.”
He says it would “be imprudent from an investor profile for big energy companies to go head-first into these new markets”, so instead they are looking at joint ventures, partnerships and even acquisitions to respond and keep ahead of the market change.
He explains that what established energy actors are trying to do is “work out where they best fit in the energy landscape. What is their play? Is it around agility in retail and commercial supply? Is it around operation of assets? Or is it asset ownership?
“In the European marketplace it is very much a sense of ‘where best do we see the future of our business’? Tech acquisition or partnership is a part of that. Utility players are considering how to best resize and reshape their business to respond to market pressure and forces.”
He says the energy sector is essentially asking itself one key question: “Is the way we have done things for the last 100 years a market that is future-ready for the next 100 years? And do we need to perfect that marketplace in order to respond to these greater challenges?”
Feehan says the need for greater flexibility and mobility in the marketplace has opened the door to technologies such as blockchain: “Blockchain helps provide part of that solution – it helps provide that real-time information in terms of generation. It helps provide an understanding of how that energy is being produced and it is giving greater choice and awareness in the market to the prosumer.”
He says what technologies like blockchain will do eventually is put a lot more power – in every sense – in the hands of the consumer and, increasingly, the prosumer.
“Blockchain is very much only the start of a continuing journey which I think can only gain momentum as the energy market matures to a far more flexible and mobile marketplace.”
Which is not to say that the need for large-scale power plants will disappear, he stresses.
“Nuclear and conventional power still have a relevance in the marketplace. It provides that top-up when renewables cannot. There is a place for all forms of generation. It goes back to the point that we have got to understand what the energy need is. Baseload will always be needed because lights will always need to be on in streets across Europe.
“The key to all of this is actually understanding more how we use energy – and that comes from the data. Only once we better understand how we use energy can we deploy assets at the distributed level, as well as at the transmission level, far more effectively, both in the marketplace and indeed from an energy solutions position. The use of data has increased in tandem with the need for more technical solutions and the need for an ever-smarter grid.”
One area in which Feehan and the energy team at Pinsent Masons have been particularly active is electric vehicles. The firm acts for all major German car manufacturers involved in an electric vehicle rollout and Feehan points out that these carmakers have come together to forward-fund the cost of EV infrastructure – in particular, fast-charging points – which he says will cut the time it takes for a zero-to-full EV charge from hours to 15 minutes.
That, says Feehan, will go a long way to delivering “a real customer choice between combustion and EV”. He says the big challenge for EV infrastructure “is in major conurbations – having charging stations which are freely accessible. On a localized level, it’s about having an understanding about when people will charge their cars and having a disaggregated energy base which can play to all environments and all use types. That is key in this quite uncertain marketplace. What we need is to utilize data to provide a way so that consumers and prosumers can make choices around car charging and around how they use electricity.”
And he says it must be remembered that “these cars have big batteries themselves. The average PV solar rooftop generates a peak of 4 kW – your battery in a car is 200 times that size. The scale the batteries in a car can bring could mean that they themselves could be part of our energy solution going forward.”
Feehan says the overall trend in the energy sector “is about the convergence of so many market segments and user types. The common thread is data, and the agility to analyze it quickly, so generators and prosumers are able to make choices quickly and accurately with more perfect market information.”
Peter Feehan is a speaker at Electrify Europe in Vienna in June, alongside several other energy lawyers from Pinsent Masons. For more details about the event visit www.electrify-europe.com