VPP, CDR and new entrants, here’s what’s coming to the Australian energy sector in 2022

2021 was a massive year of change for the Australian energy sector and 2022 looks set to be more of the same. Bringing with it new players, tighter regulations and the demand for smarter decarbonisation initiatives. We took a look at a couple of the major things that will be affecting the Australian energy market in 2022.

VIRTUAL POWER PLANTS

Virtual Power Plants (VPP’s) are a concept we expect to hear a lot more about in 2022. A VPP enables the new energy ecosystem, more complex and flexible than we’ve ever had, with the potential to deliver multi-level benefits. They’re composed of many, smaller, geographically-distributed units, and are typically based on renewable energy sources. A successful VPP relies heavily on software to collect and control assets as well as provide generation back to the grid, in exchange for payment to the individual asset owners.

VPP’s provide consumers more control over the energy they use and incentivise the use of renewable energy sources. Solar PV is the fastest growing generation type in Australia, more than 30 per cent of Australian households use solar panels. Australia is primed to lead the VPP movement and the transition to a future with more renewable energy generation.

We’re seeing many retailers eager to explore how they may leverage VPP’s to create value for their customers and better understand the impact it will have on their software requirements as the technology grows. We’re excited about where virtual technology is going to take retailers in 2022. 

COMMODITY BRAND ENERGY PROVIDER 

When you combine consumer interest, regulator scrutiny, and the growing global anxiety toward climate change, you have an environment primed for a wide array of industry leaders fighting to outperform their rivals in sustainability, either through investments or marketing with sustainability in mind. The energy sector is an attractive proposition for any large company with a significant mandate to decarbonise, the big players from oil and gas are already doing it and many big businesses have already taken a greater interest in the energy sector.

Last July, Apple committed to becoming carbon neutral by 2030 and has made sustainability a major selling point in the marketing for new products. They have since announced an 11% reduction in their production carbon footprint of the newly announced iPhone 13 Pro, and an 8% reduction for the 16-inch MacBook Pro compared with earlier models. 

Another major player, Amazon, co-founded The Climate Pledge, an initiative signed by over 200 companies to achieve net-zero carbon emissions by 2040. Its accompanying fund has already invested in a wide range of energy related technologies from battery recycling to electric vehicle charging. 

Tech companies in particular are seeking to secure energy deals to offset the substantial energy consumption of  data centres. In 2022 and beyond we will see tech companies reshaping the renewable-energy market as they tackle the challenge of ensuring their hefty investments actually reduce emissions. The mandate to decarbonise has been made clear for these big businesses, and we will no doubt continue to see others investing and seeking solutions for their carbon footprint through the means of generation. 

CONSUMER DATA RIGHT

Australia’s Consumer Data Right allows providers to develop and deliver services or provide product comparisons or quotes for consumers based on their real data. In October 2022, product reference data-sharing will begin for the energy sector. Each new CDR provider must complete an on-boarding process before they can participate in the system and access the product information data. Then in November 2022, consumer data-sharing will begin for customer data held by the Australian Energy Market Operator, AGL Energy Group, Origin Energy Group and Energy Australia Group. Energy retailers will be able to use the data to better understand what consumers are looking for from their provider and make more informed decisions when looking to tailor deals and manage the increase in demand for renewable energy options. 

There’s a lot coming up this year for the Australian energy sector, from regulatory changes to the introduction of new technologies. Flux prides itself on finding smart solutions to retailer pain points, and these changes are no different. If you’re unsure of what the next steps are for your energy retail business then get in touch with someone at Flux to discuss how we can help you achieve your 2022 goals.