Smart Energy and its method. Definition and possibilities

1 Introduction

The digital transformation stands as well as the change from today's energy systems for the use of disruptive technologies to increase productivity, value crea­tion and a sustainable environmental policy. Based on this, a range of digital pro­ducts and services are evolving to smart energy to be integrated into the daily lives of individuals, businesses, and society “Gimpel et. all (2015, p.5)”

Federal Environment Minister Svenja Schulze believes "With the Climate Bal- ance2020, Germany is making progress in climate protection for the third, year in a row. [...] But it is important to me that structural changes are also evident in the transformation of our economy toward climate neutrality. The impact of climate policy can be seen above all in the energy sector, where the phase-out of coal is making good progress. This is encouraging for other areas where there is still a lot to be done. The fact that Germany has now achieved its climate target for 2020 after all is no reason for me to rest on my laurels. The higher EU climate target will also demand more ofGermany. That's why the Germangovernmentshould already double theplanned pace of expansion for wind and solar power this decade. Further measures will also have to be examined quickly in the building sector. This is ensured by the new Climate Protection Act with its binding targets for each individual sector, which are now taking effect for the first time.” “Federal Environment Agency and the Federal Environment Ministry (2021)”

The ever-increasing concern about the sustainability of energy supply, the se­curity of our electricity supply and the related market competitiveness, as well as the resulting need to integrate an increasing share of renewables and decentralized energy resources, are impacting the functioning and design of energy systems. Smart energy can become one of the most important means for decarbonization and decentralization of the power system by means of smart energy systems. Its implementation can change the way the current infrastructure is used, that is, it can change our lives socially and culturally. In this scenario, economic and social actors in the energy landscape will have to drastically adapt their behaviors, strategies, and means of generating, delivering, storing, and consuming energy “Mönstadt (2018, p. 2648)”.

The elaboration will deal with the definition of Smart Energy. The focus is on the method that is pursued with Smart Energy and the possibilities that can be achieved with Smart Energy. With the increase of renewable energies, there is an important component of future smart energy. For this reason, the first step is to take a closer look at German energy consumption “Hentea (2021, p. 217)”

2 Energy Consumption

In general, energy is essential for all life and all living organisms. The Sun is, di­rectly or indirectly, the source of all energy available on Earth. Thus, energy choic­es and decisions affect the earth's natural systems in ways that are becoming in­creasingly important to the population, so it is important that we choose our ener­gy sources carefully and promote sustainable energies “Vattenfall (2020) “.

First, an understanding of the current forms of energy must be obtained. For Germany, Figure 1 shows the gross domestic energy consumption published by the Federal Ministry of Economics and Climate Protection.

Abbildung in dieser Leseprobe nicht enthalten

Renewable energies make up the largest share of our current energy forms. These are divided into wind power, biomass, photovoltaics, hydropower, and do­mestic waste. The consumption of electricity is becoming "greener" every year. The share of renewable energies has already been exceeded in 2020. By 2025, 40 to around 45 percent of electricity in Germany is expected to come from sustainable forms of energy.

Figure 1 shows that renewable energies are becoming more and more im­portant in the overall energy system. For this reason, it is advantageous to focus on sustainable energies. With this focus, a procedure must be defined to act with eco­nomic foresight “Federeal Ministry for Energy and Climate protection (2019)”.

3 Smart Method

With the current energy consumption, the economically interesting forms of energy were presented. As already mentioned, the focus should be placed on sus­tainable forms of energy, as these are being promoted more and more by the gov­ernment and can also result in a cost advantage for the individual consumer in the long term. To be able to use them successfully, a well-thought-out strategy and structure is required.

The SMART method is a strategic approach to define and maintain exactly this goal. It was introduced in 1981 by Locke and Lathan in a business and manage­ment context. In the course of time and the constantly changing requirements, the method was further developed to generate new challenges for larger goals. The SMART method is often used by companies to formulate goals, evaluate them, and convert them into measures.

In relation to the gross domestic energy consumption of Germany and the re­lated topic of Smart Energy, the SMART method shows far-reaching possibilities to support the implementation of Smart Energy. The meaning of the individual letters is shown in figure 2:

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Figure 2 - SMART Method “QuestionPro (2019)”

3.1 Method

Since there is still no clear definition for the term "smart", the SMART method serves as an orientation for an approach to Smart Energy. However, to act "smart" in the long term, the goals must be formulated accordingly "smart", whereby a basis for success can be created. The term is an acronym from the American, and the letters "smart" stand for: specific, measurable, accepted, realis­tic, and time-based.

The prerequisite for a successful Smart method is that all criteria of the indi­vidual letters are considered. The individual factors are presented in more detail below.

Specific

Goals are specific if they are clearly defined. They serve as the basis for long­term success by discussing the starting point. Say, "At what point should we start?". All details should be concretely summarized in one sentence. The goal of Smart Energy, simply put, is to improve current forms of energy at a better cost.

Measurable

In retrospect, it is important that the achievement of the goal can be evaluated. To make the goal measurable, quantitative, and qualitative criteria are formulated. For this purpose, it helps to formulate a strategy and an approach.

Achievable

A goal must be achievable and acceptable to all members. This means that the goals, whether set by the government or by a company, must be realistic so that they can be achieved. An optimization of energy systems does not happen over­night.

Relevant

Each goal should be consistent with certain values and larger, long-term goals. If a goal does not contribute to the overall goals, it is important to question what explicitly important and what aspects is should be focused on. Relevance can help filter out what is important to achieve the goal.

Time-based

Goals can be controlled if a time for their achievement is agreed upon. When the goal is formulated, a specific point in time is determined by which it is to be achieved “indeed (2021)“.

3.2 Relation to smart Energy

The SMART method can help both government and businesses, as well as in­dividual consumers, to move toward smart energy with simply defined small goals. The method serves as an aid to develop an understanding and approach of how smart energy can be applied.

4 Smart Energy

Around the world, political institutions, companies from various sectors and research institutes are working on implementing the vision of sustainable energy systems. So far, sustainable forms of energy have already been used successfully, which on the one hand protects the climate and conserves resources, but on the other hand also meets economic and social requirements “Servatius, et al., (2012, P. 3)"

Smart technologies are part of smart energy and will increasingly find their place in the everyday lives of the population. The shift from fossil fuels to a more sustainable energy supply and energy systems is not only about switching energy forms to sustainable sources, but also about better tracking the consumption of energy - how much energy was consumed, under what conditions?

This is where future digital meters will be needed to help determine consump­tion and performance values down to the second. From this, energy companies would increase the efficiency of billing processes and bill customers only for what was consumed. If consumption is also lower due to sustainable energies, this is another commercial advantage “Climate Interpreter (2020)”.

4.1 Opportunities

The efficiency of energy brings with it a billion-dollar market. This results in a forecast made by a market research company that the German energy contracting market will grow by 12% annually from € 1.75 billion in 2008 to € 5.74 billion in 2018 “Flauger (2010)”. At this point, however, the sales with the supplied energy are not included. This business model had been long established with major cus­tomers. Contracting models for private customers, on the other hand, are not yet widespread. When it becomes clear that round about 40% of German energy con­sumption and around a third of carbon dioxide emissions are attributable to the building sector, it becomes clear how important it would be to implement econom­ical forms of energy-efficient building renovation “Stratmann (2010)”.

The most important characteristics of smart energy were identified in chapters two and three which brings up that there are 5 key opportunities for application. These are illustrated and discussed further at figure 3 below.

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