2024 marks the year of the grid
If 2022 was characterized by the energy crisis, with soaring energy prices across Europe and electricity costs dominating discussions, and 2023 witnessed a return to normalcy, 2024, as highlighted in a recent article by Sifted, is deemed the year of the grid. We wholeheartedly agree and go as far as proclaiming it the year of the VPPs (Virtual Power Plants). Unfamiliar with the abbreviation? Continue reading to discover why VPP has become the buzzword of the energy industry. Here are our four predictions for 2024.
The Rise of VPP
The energy market is undergoing radical changes, shifting from passive consumption and centralized production toward a more volatile and greener energy system. The International Energy Agency (IEA) predicts that by 2028, renewable energy sources will contribute to over 42% of global electricity.
However, this transition poses challenges, such as increased price volatility and added strain on the grid. A solution that has received an increasing amount of attention in the energy sector is called VPP, standing for "Virtual Power Plant." Residential VPPs involve utilizing existing resources like electric cars, batteries, heat pumps, and solar cells connected virtually to coordinate, produce, store and shift electricity. Bringing these resources together, directing them to function as one large virtual power plant, is a pivotal role played by a so-called aggregator. VPPs can effectively balance the electricity grid and optimize the use of renewable energy. VPPs have previously existed; however, traditionally, aggregators have been energy producers. 2024 marks a shift towards residential VPPs.
While numerous players have announced their residential VPP solutions, most have yet to demonstrate how these solutions benefit end consumers or provide solutions beyond pilot scale projects. In 2024, we predict this sector will mature, showcasing how VPPs play a crucial role in the energy transition at scale, directly benefiting consumers.
As of today, Tibber is successfully shifting hundreds of megawatt-hours of energy to off-peak periods every single day via the hundreds of thousands of electric vehicles smart charging on our platform. Benefiting both the consumer and the electricity grid. And rest assured, we have even more innovations in store for you ;)
From Savings to Earning
As (VPPs) gain traction across Europe, we're witnessing a growing trend towards owning flexible assets such as electric vehicles (EVs), heat pumps, and batteries. This trend is driven by various factors, including increased adoption of renewable energy sources, policy support, technological advancements, and economic incentives. On a consumer level, owning flexible assets like EV batteries and heat pumps can potentially earn you money. These assets can assist the electricity grid by balancing supply and demand or reducing peak energy usage. In return, you may receive compensation for providing these services.
Could 2024 be the year when people shift their focus from saving on electricity bills to making money from their electricity?
Boosted interest in home energy efficiency
Despite significantly lower electricity prices in 2023 compared to 2022, there were greater price fluctuations. Our forecast for 2024 suggests that electricity prices will largely mirror those of 2023, with no dramatic spikes. With electricity prices becoming less of a discussion point, we anticipate increased interest in topics such as energy efficiency and smart energy usage. A study conducted by Kairos Future indicates that despite Europe being in a recession, 81 percent of homeowners plan to invest in making their homes more energy-efficient. 40 percent of homeowners expect that their homes will be equipped with solar panels within ten years.
A clean-up of the industry
Electricity companies have long suffered from a negative reputation due to untransparent energy deals, contracts that are difficult to terminate, and aggressive telemarketing. In fact, these are some of the reasons Tibber was founded. To turn the energy industry upside down. By not profiting on selling energy but instead offer customers the best tools available to help them take control and lower their electricity consumption, and thereby also their electricity bills. And it seems to be working. Tibber consistently ranks at the top in customer satisfaction rankings conducted by third parties in Norway and Sweden.
The last couple of years we have seen different customer agencies become more active in trying to regulate the market and we are predicting we will see more of that during 2024. The industry is in need of a clean up and customers deserve transparent and fair deals.
