Introduction
To keep the social and economic development sustainable, more effort have been made on security and stable transportation in energy, and more attention should be paid to the intensive layout of energy infrastructure, the optimization of energy consumption structure, and the reasonable way to consume energy. The distributed energy system (DES) is an innovative energy consumption mode played out against this situation. It adopts clean energy, with a method of energy cascade utilization close to the client side. It is safe, clean, efficient, flexible, economically efficient and intelligent, and its utilization has been demonstrated in the past 10 years. Furthermore, there are some questions to be considered for DES development: how to seize the opportunities from production and consumption revolution in the “Internet Plus” action plan? How to overcome the obstacles to deploying the DES? How to highlight and boost large-scale development of the DES by energy technology revolution?
Under the background of energy revolution, the State Council issued the guidance for actively pushing forward the “Internet Plus” action plan which clearly set forth 11 specific actions, including the Internet plus Intelligent energy. The goal of energy production and consumption revolution is to build a reliable and stable energy production and supply, not to damage the ecological system simultaneously. The energy system revolution will bring more flexible alternatives of energy consumption for the users. The users will probably become both energy producers and consumers. The formation of the business model of Internet plus DES under the background of energy revolution and the “Internet Plus” action plan is the best interpretation of energy consumption, supply, technology and system revolution.
In this paper, reflections on the sustainable development of the Internet plus DES in the future were made by reviewing the policy development process and by summarizing domestic and abroad project experience, targeting at natural gas, combined cooling heating and power (CCHP), and distributed photovoltaic (PV) power generation. Besides, new ideas and suggestions on business model were proposed for the Internet plus DES based on the client side.
Domestic and international DES development
Definition evolution and connotation of DES
The definition of the DES and its nomenclature in English are changing gradually with its development. The different characteristics for the DES may be emphasized respectively in different areas and/or professional associations according to their energy requirements.
1) Distributed generation (DG) is the earliest description of distributed energy by the USA electricity company. It mainly refers to the scattered small generating equipment which produces electricity on the client demand. It is regarded as an electric power supply security method. The concept originates from the grid connected with the user’s emergency generator to maintain the diversity of electricity grid security.
2) Decentralized energy is used by the World Alliance for Decentralized Energy (WADE). The word “decentralized” emphasizes decentralization or non-centralization. The energy in the definition is not a monogamous power supply. It also can be supplied locally and in multiplicity. WADE focuses more on distributed energy fuelled by gas, and takes into account the CCHP fuelled by coal.
3) Distributed energy (DE) or distributed energy resources (DER) is widely applied in the United States. “Distributed” means the systems distributed in the client side are interrelated and interacted with each other, as like a network energy system. “Resources” means renewable energy, waste heat and other decentralized or abandoned energy which are regarded as recycled resources.
4) The “Technical specification of engineering for decentralized energy system” [] was completed first in Shanghai in 2005. The “decentralized energy system” was called in this “specification” by a comprehension of eight international statements. The aim of the specification is to vigorously promote the construction of the distributed energy supply system, optimize energy consumption configuration, and build up an energy supply system with diversity and security. It defined the “decentralized energy system” as a new type of energy system which supplies electricity and heat independently on the client side or close to the clients. The system can transform waste heat into refrigeration, heating, hot water supply besides electricity generation. Natural gas, biogas and other renewable energy sources generally serve as primary energy sources.
5) “Chinese interim regulations on management of distributed generation” (No. 1381(2013) EA-NDRC) was issued in July 2013 in order to push forward the application of the DES, promote energy-saving emission-reducing and development of renewable energy. Distributed generation was defined in this “Regulation” as the facilities of generating electricity or the system of energy cascade utilization apart from the fact that electricity was generated on the client side or close to the client. The system mainly meets the demand of the clients, while the excess electricity will be supplied to the power grid in balance by adjustment. This definition focuses on its electricity-generation function, highlights the distributed power generation and usage on the client.
In summary, although the starting point and definitions are different, the electrical safety based on the client side is always considered first, and the following two properties are included:
1) Close to the client. According to its energy resources and different requirement of electricity, the primary energy sources are chosen based on local conditions, such as natural gas, biogas, solar energy, wind energy, bio-energy and other renewable energy.
2) Apply directly, work independently. There are three ways used by the DES: grid-tied, off-grid or accessibility to power grid. Its application strategy should be taken in light of the local conditions.
In addition, the CHP has the distinction of energy cascade utilization besides power generation, in which high-grade energy can be used to generate electricity and low-grade energy for cooling and heating, thus the energy efficiency can reach up to 70%.
Policy and strategy review
DES for power: important choice for global energy transformation
A review of the development of the DES in developed countries indicated that energy supply has experienced decentralization, large-scale centralization, and the DES supply. At first, the original intention of developing the DES is to improve energy efficiency. It usually adopts the CHP mode from fossil energy such as natural gas during the 1980s. Since the beginning of 21st century, the governments have paid more attention to low carbon and clean energy against global warming all over the world. The development of the DES has been gradually expanded from the traditional fossil energy to renewable energy. Compared to the traditional centralized energy supply, the DES is safe, clean and highly efficient. The DES can gradually and locally substitute for the centralized power supply on the premise of meeting electricity requirements on the commercial competitive cost level. In recent years, with the development of technology research, equipment manufacture, system integration and large-scale applications, the DES has become an important option to energy development in the world. Due to the differences in resource and industrial characteristics, the development of the DES and the starting point of each are also different. After the US suffered a major blackout in 2003 and Japan suffered the earthquake in 2011, these two countries had to rethink the centralized power generation. They promoted the development of the DES from the perspective of increasing the security of electricity supply. However, Denmark and Germany, two members of the EU, will promote the DES, including renewable energy, as an important measure to reduce greenhouse gas emission by 40% in 2020 than the level proposed by the EU in 1990. Basically, the development of the DES in various countries is from the large CCHP system to the small DES based on the clients’ side.
1) The US
Under the influence of the 1973 energy crisis, the United States Congress passed the “Public Utility Regulatory Policies Act” in 1978, designed to encourage the use of more efficient energy systems, which greatly led to the development of distributed energy system based on the CCHP. After 2000, the new CCHP installed capacity began to decline gradually in the United States. There are two main reasons: first, because the electricity market has been opened in some areas, some power suppliers can directly sell electricity to the market without the application. Consequently it became uncertain to invest in the CCHP market. Secondly, the fierce undulation of natural gas price after 2000 had a rather big impact on the DES based on natural gas, and brought about the decrease in the investment in this area. After the major blackout in 2003, the demand for distributed energy facilities gradually shifted to the security of power supply. The CCHP capacity in the US installed by 2011 had reached 82 GW, accounting for 8% of the total installed capacity. These sets were distributed within the more than 4200 facilities from different industrial and commercial affiliations. In term of user types, 87% of the installed capacity was applied to industrial facilities and the rest was used in commercial sectors and institutions (such as schools, hospitals, etc.). In terms of energy resources, 72% of the installed capacity uses natural gas as energy resource, while the rest of the capacity uses biomass, waste and coal as energy resource. 63 ×106 tons of standard coal are saved and 240 ×106 tons of the emissions of carbon dioxide are reduced (equivalent to exhaust emissions of 40 ×106 automotive) each year. In 2012, the Obama administration proposed to increase 40 GW of CCHP installed capacity by 2020, saving about 35×106 tons of standard coal and $10 ×109 for the users.
2) Denmark
Located in northern Europe, Denmark began to adopt central heating in the 1960s due to the cold weather in winter. At that time, Denmark mainly depended on imported oil and other fossil fuels to provide decentralized heating for the individual family. Due to the low price of oil, low energy efficiency of distributed heating is not at all a problem for users. After the 1973 energy crisis, the sharply increase of international oil prices resulted in a doubled heating price. The Danish government was forced to adjust the energy configuration, implement energy conservation policy to safeguard social interests, and reduce the users’ cost of heating. The Danish government adopted a series of policies to promote the CCHP for district heating. Forestry is the main industry in Denmark; a lot of wood wastes are produced during the manufacturing process. The government introduced policies to promote the development of distributed energy resources based on biomass. In 1990, in order to adjust the energy configuration and improve energy efficiency, the Danish government decided to shift the thermal power plant into a CHP based on natural gas/biomass gradually for 8 years hereafter. In 2005, the Danish government combined DES with smart grid in construction of energy facilities, and further strengthened the construction of distributed renewable energy and small-scale DES. A comparison of the changes in the power supply from 1985 to 2009 in Denmark indicates that its configuration of energy supply has changed from a single centralized power to the diversified DES such as coal, natural gas, biomass and wind. During this period the Danish economy was increased by 67%, while its energy consumption was decreased to the level in 1980 and carbon emissions were reduced by 21% []. All the new power plants have to use renewable energy or the generator must generate both electricity and heat. The CCHP accounts for 53% while renewable energy accounts for 30% of the power supply in Denmark []. The carbon emissions per capita in Denmark are 52% lower than that of the United States. In spite of this, the Danish possess a very high quality of life, and enjoy the most reliable power supply in Europe with almost the lowest pretax price [
1].
3) Germany
Germany has the largest energy market, with a main network of electricity and gas in Europe. Its power supply is mainly dependent on coal and nuclear power (accounting for 60% and 23%, respectively in 2008). Therefore, it is facing a great pressure in the reduction of emissions. The German government also addresses the high efficiency and low-carbon emission for electricity supply. To conserve energy and reduce emissions, Germany has promoted the development of CCHP for a long time, issued an act for CCHP in 2002 by the bonus and subsidies, further approved a new act for CCHP in 2008 in order to reduce greenhouse gas emissions by 40% until 2020 based on the emissions in 1990, and proposed that the installed capacity of CCHP should reach up to 25% of the total power generation. In 2011, the German government decided to gradually decrease the scale of nuclear power and planed to deactivate all the domestic nuclear plants in 2020 due to the earthquake in Japan which promoted the transformation of energy to CCHP in Germany.
In 2010, the installed capacity of CCHP in Germany reached 23 GW (No. 1 in Europe), accounting for 16% of the total electricity supply. Coal played an important role in the power industry, accounting for 91%. But natural gas and biomass energy were more common in smaller scale CCHPs, especially the biomass ratio arrive at 73%. This phenomenon is inseparably linked with the German industry. The German animal husbandry wins high worldwide reputation. The booming cattle breeding industry contributes to the use of biogas. The German government began to promote the development of DES a long time ago and a relatively complete industrial technology and industrial chain had gradually been formed. Until 2010, Germany has built more than 6000 biogas projects, 98% of which are used to generate power, with an installed capacity of 2700 MW. There were 40 biogas factories with an installed capacity of over 2 MW. Biogas could generate over 20 TWh of electricity on average each year, accounting for 4% of the annual electricity consumption in Germany.
On the other hand, the electricity consumption of the residents accounted for 29% of total consumption in Germany. To meet the energy demands of the residents, some enterprises began to develop a micro CCHP, with a capacity of 5 kW.
4) Japan
Japan has been attaching importance to the development of natural gas due to the lack of the primary energy source. For improving energy efficiency, the Japanese government began to vigorously develop the CCHP in1980s. In 1990s, as the power market was opened up, the CCHP had been developed rapidly. After 2000, the rising natural gas price and the lower electricity price had greatly weakened the competitiveness of the CCHP and influenced the growth of the installed capacity of the CCHP. Up to 2011, it had a total installed capacity of only 9.5 GW, accounting for 3% of the total power generation capacity. In term of scale, the Japanese CCHP has a trend of miniaturization, with the average installed capacity of 2.4 MW in 1996 decreasing to 0.25 MW in 2008. The clients of the CCHP changed from large industrial users to miniaturization business and residential users.
After the earthquake in 2011, the Japanese government had to rethink the centralized power supply system, began to adjust the energy development strategy, and deactivated all the new nuclear plant projects. In the local new energy development strategy, energy sources from nuclear power plants must be substituted by those from the DES based on natural gas. According to the plan, the installed capacity of CCHP will reach 22 GW and the proportion of electricity generating capacity will rise from 3% to 15% in 2030. It is expected that the cumulative investment will reach $60 ×109. The development roadmap of Japanese DES is shown in Fig. 1.
The Japanese government wanted to combine family energy storage with renewable energy, electric vehicles and smart grid to form a smart community. With the support of the government, many local companies worked in unison to release the domestic micro energy system in 2009.
Technological innovation and improvement for commercialization of DES
Technology is an important driving force for the development of DES worldwide. Technological advancement will accelerate the commercialization of DES in the following two aspects:
1) DES is developing toward technology integration, service modularity, and low cost equipment. DES started from industrial users because there are steady demand for electricity, heat and cold and a higher demand for installed capacity of energy system in industrial production. It gradually expanded to miniaturization business and residential users with technology innovation and integrated service optimization. For individual users, the enterprises in German, Japan and other countries have developed a micro DES with modular integrated to meet the great amount of market demand in family. For example, in Japan, the average installed capacity of single DES based on natural gas declined from 2.4 MW in 1996 to 0.25 MW in 2008.
Japanese enterprises have developed a micro CCHP and micro fuel cell system suitable for the demand of individual users. In addition, the development of the technology and the integrated system results in the reduction of the cost and the improvement of the performance and efficiency of the equipment. For example, the average cost of the distributed PV modules declined from $6 per watt in 2001 to $1.16 per watt in 2012, with a total cumulative decline of 80%. So the sales price to network of photovoltaic had steadily declined in German, the US, Japan and other countries. In some areas of Germany, the electricity price of residents have already exceeded the solar PV tariff sold to grid (the electricity price of resident users is usually higher than industrial customers in some countries). Therefore the new business model will emerge.
2) DES is client-oriented with a new business model of the Internet plus DES. Internet plus DES constitutes an integrated energy supply and management system on the client side. An effective balance between energy supply and energy demand is achieved by the real-time data collection of powered device and the optimization and plan of transmission and distribution. The new economic and social value can be produced by analyzing a large number of real time data obtained in intelligent management. For example, the enterprises can conduct energy saving optimization and process management according to the data. The derivative values for economical evaluation or forecasting from these data may be supplied to public or private enterprises. This creation of diverse business value means diverse participation mechanism and benefit sharing mechanism, which makes it possible to promote the scale development of the Internet plus DES.
Government support for business model innovation of DES
Internationally, although the cost of DES power generation is decreasing, the government support to DES has been weakening in each country. However, the supporting policies have not completely withdrawn. The governments of each country chose to give a more targeted and precise support to promote the market to find business opportunities. The fittest enterprises in DES will survive through business model innovation. A comparison of DES policies in different countries indicate that there are four characteristics as stated below.
1) It is still certain to develop DES for many countries who have made policies to provide safeguards for DES accessibility to power grid and the electricity sales service. The “Utility Regulation Policies Act” of the US and the “The Direction for CCHP” of the EU are still valid. To develop more DES projects, each country continues to enhance the scale of DES. By providing basic and safeguard policies, the DES power access can enjoy an equal or more convenient treatment than centralized power access. Besides, governments take incentives in reserve price, access fee, etc. In addition to use of the power generated by itself, the US and some other countries encourage the enterprises other than the traditional power suppliers to enter the field of DES by signing an agreement on purchasing the power through the third party.
2) Many countries encourage investing and financing of DES, and stimulate business model innovation. Although the investment subsidies were significantly reduced, the policies made still promote the investment of DES. Some countries provide direct financing channels. For instance, Japan provides the low interest loans with 1.65% (below 6% for industrial projects) for the CCHP in which the primary energy utilization rate achieves 60% or above. In Germany, Bank aus Veranwortung (in Germany) supply the refinance service to the commercial bank for the loan of solar PV project. Some countries encourage investment. For example, the US government provides commercial investment tax relief for the DES that meets the energy efficiency standards. The solar PV enterprises can enjoy the tax shield policy of five-year accelerated depreciation and investment tax credit policy. Simultaneously, the federal government encourages cross-industry investment in DES projects. To make full use of these policies, the American energy service companies design a variety of business models. Solar City and other innovative enterprises act as an emerging force and lead the DES market in the US.
3) Some countries made precise policies to guide the development of DES. For example, Germany released the subsidies policy in 2006, realizing the parity price for connection to grid and canceled subsidies in distributed PV industry. Since 2012, Germany has provided an allowance for the combination of light storage projects. The DES policies of some forerunner countries are listed in Table 1.
Although the starting points of many countries are different, the successful practice in these countries can mainly be concluded as follows.
1) Focus on power supply safety, energy efficiency improvement, clean emissions.
2) DES should consider available resource on the client side.
3) The clients of DES are gradually changing from industrial customers to commercial and residential customers.
4) The stable and continuous government support is the key. According to the supporting policies, regulations and standards are guarantees. There are four aspects in promoting the development of DES. The first one is the establishment of the price mechanism which follows market rules. The second one is encouragement of technology research which satisfies market demands. The third one is the promotion of technology innovations through transformation of scientific research achievements. The last is the long-term stable supporting policies.
Incentive policy development and trend for DES in China
Policy progress of DES
DES has been developed in China for more than ten years, which can be broadly divided into the introduction stage, the propulsive stage and the promotion stage (Table 2). Since the 12th Five-Year-Plan, DES has entered into the propulsive stage. The supporting policies have been released including the DES based on natural gas and distributed photovoltaic, etc. The issue of “Interim Regulations on Management of Distributed Generation” indicates that DES has been promoted on a full scale in China.
The issue of the “Advices and Opinions on Further Deepening of the Reform of the Power System” in March 2015 by the State Council marks the official starting of electricity reform in China. The electricity reform has become an important driving force for DES. Its core objective is to get rid of the power grid monopoly and establish a market-oriented electricity pricing mechanism. The reform intends to expand the scope of direct power supply for large customers and open up an electricity market for small and medium scale enterprises. This will have a great influence on the adjustment of Chinese energy configuration and the development of new energy. Meanwhile, it will promote the transformation from centralized power supply to DES, and play a guiding role for the innovation of mobile energy in marketing models.
Market demands on DES
At present, the market demands on DES can be divided into 4 categories.
1) The pollution from coal burning of power plant and industrial boilers has to be controlled, etc. It also requires finding out demands on future energy consumption.
2) The power system with large unit, high voltage and large power grid is vulnerable because of regional, seasonal and short time power shortage. Therefore, the problems of daily electricity, peak shaving and emergency reserved are to be solved. DES played an important role when the US suffered a major blackout in 2003, Japan suffered the earthquake in 2011, the south of China suffered ice and snow in 2007, and the north of India suffered the emergency power interruption in 2012. In recent years, many regions suffered the power failures caused by typhoon and rainstorm in the summer, resulting in the subway outage, shortage of emergency power supply for the traffic signal lights, and heavy losses in the breeding industry. These accidents made the public to rethink the safety of electricity supply.
3) The development of natural gas and renewable energy creates opportunities for energy configuration optimization. However, the large-scale power plants based on natural gas face the double pressure from peak load shifting of gas and electrical generation. The DES can alleviate peak load shifting and emergency problem in urban area.
4) The DES on the client side should be developed based on the available sources. The energy efficiency and safety can be improved by adopting the CCHP based on the natural gas (biogas) combined with the other energy; the energy balance of power, gas, cooling and heating on the client side can be achieved by using the DES, providing a new approach to solve the security problem of power supply.
In summary, DES is an important supplement to centralized power generation and the transmission system. The energy is customized on user demands. The energy can complement each other and the energy sovereign can be given back to the people. It is conductive to energy security, comprehensive utilization, configuration adjustment, energy saving and emission reduction.
Technological innovation of X+ DES+ Internet
Appropriate technology
DES covers many energy supply technologies. According to energy origination and the needs in the variety of fields, DES were divided into 5 applicable scopes in “Interim National Regulations on Management of Distributed Generation” and 9 types of appropriate techniques were preliminarily chosen. It can guide the design of the DES system in 8 fields as a reference.
1) Applicable scopes: Presently, the DES can be applied to small hydropower with a total installed capacity of 50 MW and below; power generation by wind, solar, biomass, ocean energy, geothermal energy and other new energy which can have access to distribution networks with various voltage levels; all kinds of waste power generation except for the direct combustion of coal, power generation with a variety of complementary energy, and with comprehensive utilization, such as waste heat and waste pressure, and power generation by mine gas or the coal bed methane with a installed capacity of 50 MW or below; the CCHP based on natural gas with an energy efficiency of higher than 70% and the power used on the spot.
2) Appropriate technologies: The DES is appropriate for the integrated technologies for small hydropower; the photovoltaic technology based on consumer side and combined with buildings; the grid-tied wind power with dispersed layout and solar power generation technology; the small wind and solar storage technology with a complement of other technologies; the power generation and CCHP technology with industrial waste heat, pressure and gas; the power generation and CCHP technology with gasification, direct combustion from agriculture and forestry residues, organic waste water and domestic waste; the power generation and CCHP technology from geothermal or ocean energy; the CCHP on natural gas, and power generation by coal bed methane (coal mine gas) ; and other DES power generation technologies.
3) Fields: The DES can be used in various enterprises, industrial parks, economic development zones; buildings or facilities owned by government and public institution; public buildings or facilities in culture, sport, hospitals, education, transportation; commercial buildings or facilities, such as hotels and offices; residential communities and buildings, and independent residential buildings; villages and towns; remote pastoral areas and islands; other areas suitable for distributed power generation.
Overall, China’s DES projects have been focusing on DES integrated technologies over the past decade, that is, X technology plus DES plus Internet. Among them, the intelligent monitoring of projects by the information technology is mainly conducted in energy service companies. Interactive cases on client side are still few and far between.
Analysis of consumers of DES projects
In view of current policies, when developing suitable DES projects, it is suggested that the following 5 kinds of consumers should be focused on (Fig. 2), based on the actual practice of many years and field research of nearly a hundred projects.
1) Consumers with high security requirements on power supply, such as hospitals, military bases, transportation hubs, data centers, agricultural farming, and key laboratories.
2) Consumers who are less affected by the climate, such as transportation hubs, airports, railway stations, etc.
3) Consumers with stable heat demand, such as industrial enterprises or industrial parks.
4) Consumers who have to pay a high electricity price, such as field operations, islands, some villages, fishery, etc.
5) Consumers with special requirements for energy saving and emission reduction, such as companies which are looking for the substitution for coal-fired boilers.
In general, the DES is needed by both the suppliers and the users. Taking into consideration the load of heating and cooling, the stability of load, and the continuous operation time and consumers’ special requirements, an example of natural gas as energy resource can be taken to make a sequence in the fields of DES application, as tabulated in Table 3, (3 for the highest, 1 for the lowest).
Analysis of successful factors in implementation of DES
By summarizing the operation of the projects, it is found that the most important factors of the DES implementation are the resource supply, energy price, and service ability under the same conditions. Five key issues are likely to be faced with in the designing, construction and operation stages of the DES.
1) Load: Since consumers have their own load characteristics depending on different regions, climate conditions and functions, the adjustment mode of cooling, heating and power needs to be considered while designing.
2) Selection of main engine: There are a variety of main machines, including CCHP, PV power generation, machines for exhausted heat, biomass energy, fuel cell. Besides the main machines, there are also waste heat utilization equipment, control system, etc.
3) Environmental requirements: The environmental requirements differ in different regions. Special environment protection such as noise and waste emission should be considered in regional DES planning.
4) Integration of DES techniques: Although DES has a wide application, more attention should be paid to the performance and price of the DES equipment than to system integration. DES system integration should be considered more in the future.
5) Issue on operation and maintenance: compare to the traditional energy applications, the DES is required to tailor-make for consumers. The DES team should be more professional, which has a significant influence on project operation.
In conclusion, complete lifecycle management is the key to DES with high efficiency. An excellent solution to the DES should be of economic security and good service, which includes the following five key points.
1) The key to select the project is the economic load on users’ demands.
2) The difficulty of project management lies in the load forecasting and management on users’ side.
3) The core of the project benefit is the appropriate business model.
4) The enhancement to the risk resisting ability is ascribed to the contract.
5) The key to break the technological bottleneck is the talented person.
Innovation cases of technology integration and business model in Internet plus DES plus X
Driven by the Internet plus intelligent energy, more attention should be paid to the clients’ demands, precision services, and innovative business model in the new round development of the DES. Project categories should be expanded from a single user to an area of many users, and from the urban to the rural. Energy resources should be transferred from one species to many kinds. This section is an analysis of some innovation cases in Shanghai or from some of the related enterprises (Table 4), including DES in the low carbon business park, the demonstration projects of coal-fired boiler replacement in modern industrial parks, landfill upgrade to new energy resource, non-grid-connected wind power system used in energy-hungry model directly, trial on the industrial energy internet, and intelligent energy in organic farm, etc.
Case studies of industrial DES technology and intelligent energy industry service
The project, located in Laogang Industrial Park, covers a planning area of 8 km2, specializing in electronics, cables, printing and dyeing, and fine chemicals. It aims to replace the industrial coal-fired boilers in Shanghai. It is the first demonstration project of the DES utilized in industrial parks in Shanghai. The main engine is made in China with its own intellectual property. An energy service company, Minxin Energy Science and Technology (Fig. 3), has been set up by multi ownership investors with the aim to supply professional services. The 25 coal-fired boilers in the park are to be substituted by clean energy by the end of 2015. By that time, the centralized supply of steam, electricity and water can be achieved, and the security of power transportation among the power stations can be improved. After the project is completed, no heating boiler is needed in the enterprises in the park, and Minxin will provide steam and other energy according to the users’ demands. The steam cost can be reduced by at least 25%, thus decreasing the economic burden of the enterprises in the park. At the same time, by intelligent and synergic control of regional multi-user load, the project is devoted to building an innovative district, localization of the core equipment of DES, and the service platform with both DES technology and intelligent energy industrialization.
A regional energy model with multi-energy complement in a national ecological county
The Potevio New Energy Co. Ltd. and Xianju, a national ecological County in Zhejiang province collaborated in the project of David Century City Energy Center, establishing a regional energy model for energy conservation. It will promote the regional economic transformation and upgrading by the reliable energy system with low cost, less impact on environment, and maximum comprehensive efficiency. The energy saving planning includes regional infrastructure (Fig. 4). The energy saving technology integration system involves the regional DES and solar energy utilization system, the heat pump system based on ground source and water source, the green lighting system, the new heat preservation material utilization system, and the monitoring and management platform of the energy center.
Smart energy service for consumers in various industries+ gradient utilization of batteries
Shanghai Ruihua (Group) Co. Ltd. is in charge of the power integration system of the development of hybrid electrical vehicle (battery+ capacitance) in Shanghai. It has established a business model of “battery lease+ vehicle energy intelligent service”. Bus companies pay Ruihua (Group) Co. Ltd. for battery rental and supporting services instead of paying for fuel vehicle operation and maintenance as they used to, which is a win-win practice for both Ruihua (Group) Co. Ltd. and the bus company. This model could provide the whole life cycle service for public transportation. For example, Ruihua (Group) Co. Ltd. can provide different batteries according to the distance the buses can cover, intelligently monitor the batteries and the system, achieve real-time warning by mobile phone, provide timely service for bus drivers, improve safety and economic efficiency, enhance mileage and service life of battery, and reduce the work intensity of the drivers.
At the same time, Ruihua (Group) Co. Ltd. has established a smart micro grid system called “Smart Energy Service for Consumers in Various Industries+ Gradient Utilization of Batteries” to achieve battery cascade utilization, support the DES+ storage access and intelligent monitoring (Fig. 5). The navigation services are convenient and flexible to users. For example, the battery cascade utilization mode can achieve peak load shifting, which can store energy in the valley at night and supply power in the peak at daytime for commercial buildings. It will improve the utilization rate of the battery and achieve the conservation of building energy.
Innovative business model of Internet plus new energy vehicle industrial chain
“Internet Plus” will lead to an integrative development of many industries. The intelligent charging station combined with distributed photovoltaic plus storage battery is shown in Fig. 6, which has been put into operation by the end of 2014 in Songjiang, Shanghai. The roof of the charging station is a 10kW solar photovoltaic system, whose maximum conversion rate is up to 22% and the output per day can be sufficient enough to charge the batteries of 2.5 electric cars. The charging station is grid connected, which will automatically switch to the grid power supply in case of rainy days or more vehicles are to be charged, and the storage can be used for emergencies. The charging station has the characteristics of distributed clean energy utilization and intelligent operating management services. Users can find the nearby charging station, or make reservations using the APP through which the charging process can be monitored at any time and convenient payment can be made using unionpay or other mobile payment. This project is an exploration of the new business model of the combination between photovoltaic power generation and new energy electric vehicles based on “Internet Plus”.
In the charging pile industry chain, charging operation service is crucial, because it determines the overall profit. The Potevio New Energy Co. Ltd. specializes in new energy vehicle charging network construction, operation and services, which is devoted to providing the professional, internet operation service by constructing the national new energy automobile operation network platform. In 2011, Potevio, taking the advantage of Universiade, was the first to establish the charging infrastructure based on the network operation and management in Shenzhen. The charging infrastructure can monitor the new energy vehicle and the operation of charging facilities, collect information and analyze all transaction data automatically to ensure the security of electric charge and vehicle operation and the service quality. By July 2014, Potevio had built 74 direct charging stations, more than 900 charging piles which can be sufficient enough to charge the batteries of 3700 new energy vehicle in Shenzhen. Shenzhen has become the largest city of new energy vehicle network operation. In the future, with the development of new energy vehicles in Shenzhen, it will gradually blend into the intelligent traffic and make contributions to information services (Fig. 7).
In the long run, charging facilities operation service has the most potential. With the help of the “Internet Plus” plan, the combination of destination charging service with multi business is more than just the “electric pile” itself. It has formed a new business model of Internet plus new energy automotive industrial chain. Market services, cultural creativity, vacation tour, entertainment and other aspects of shared services will bring higher share of economic benefits to the new energy automotive industry.
Reflections on business model after electricity reform
In March 2015, the issue of “Advices and Opinions on Further Deepening of the Reform of the Power System” by the State Council marks the start of the second electricity reform in China. With further opening of the electricity market, breaking the monopoly of power supply, squeezing out the transaction property of the electricity grid system, users can freely choose the power supplier or cooperate with the power generation companies directly under bilateral trading mode (Fig. 8). In another word, users or power supplies can directly sign agreements with the power generation plants. Therefore, the competitiveness of the power suppliers lies not only in the low price, stable power supply, but also in the management on the demand side, energy saving service and personalized solution, which becomes important factors for power suppliers to decide if they have to relocate. This policy has definitely optimized the external policy environment for the development of the Internet plus DES and will promote its sustainable development. The integration of the Internet and DES can improve the system intelligence and price transparency, and make the operation of each part more economical and more coordinated.
Construction of an ecosphere of Internet plus DES
The government promotes the development of energy service enterprises in the field of DES, and the market players are, therefore, continually increasing. All kinds of energy companies take the important opportunity to develop DES such as expanding the business sectors, extending the value chain. The DES service industry will develop with the improvement in technology and market environment, responding changes of users’ demands and the energy using mode.
To promote the construction and development of the DES service industry, the DES Industry Technology Innovation Strategic Alliance in Shanghai was established in 2014, taking the national energy strategy and Shanghai science and technology innovation center as the guidance, and taking the enterprises as the targeted customers, with the target to strengthen company competitiveness. It aims to achieve the effective combination of enterprises, universities and research institutions on the strategic level by optimizing the mechanism of DES industry technology innovation chain, with the mission to break through the technical bottleneck of DES technology innovation and industrial development, and enhance the comprehensive competence of the DES industry in Shanghai.
The DES Industry Technology Innovation Strategic Alliance stands in the forefront of the DES industry trades. The alliance will take the advantage of the groups, realize the combination of enterprises, universities and research institutes and break technical barriers made by foreign competitors, and use the new concept of Internet to create a new culture. The alliance will show the new technology and new life style of the DES to the public, and lead people to create a more secure, more efficient and cleaner environment.
The integrated services provided by the alliance will enjoy more popularity. To cover all the stages of planning and design, construction and operations, management services, monitoring and assessment, and cultural dissemination, the alliance should build an education training platform, a standard publicity platform, an academic exchange platform, a cultural propaganda platform, a professional training platform, a science enlightenment platform, a policy advocacy platform, an energy saving and environmental protection platform, a student internship platform, etc (Fig. 9).
Conclusions
The innovations based on the Internet plus DES should be user oriented to supply the accurate and convenient services. The principle of 4E, that is, “energy availability, environment friendly, economical and easy” must be adhered to when evaluating and choosing a project, and optimizing the technical solution to the project. The characteristics of “safe, clean, efficient, economic, intelligent, and flexible” must be focused on when building an energy supply system.
Intelligent energy modularity and customized energy services ordered like a menu will become an important way of the DES services. The basic menu is to supply the safe energy based on users’ own demands. Intelligent technology modules including portable, hand-held equipments, intelligent electric meters, intelligent gas meters, intelligent energy network, intelligent interaction, energy sharing and other kinds of modern services will be a standard menu for energy services. Therefore not only residents in remote rural villages but also energy stations of important unattended bases are potential users of the DES. The dream of purchasing energy online will finally come true.
The DES development based on user side makes the user to have a sense of ownership, and gives the energy sovereign back to the people. It not only solves the energy problem, but also provides a chance for independent innovation. It is especially beneficial for employment in rural areas, because the users could be transformed to energy service suppliers. In the future, the fact that “You are in charge of your own energy production and consumption, while we are also at service when needed for installation and maintenance” will become a kind of new thinking in DES service industry and form a new model of services. This new model will lead to a new style of life. With the implementation of the “Internet Plus”, the Internet plus DES ecosystem will be gradually improved. What is worth thinking now is how to grasp the market opportunities, how to get the right entrance to the coming energy market, and how to make the innovative technologies and business models to win in the future energy markets.
Higher Education Press and Springer-Verlag Berlin Heidelberg
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