Substantial change is set to take place over the next several decades as more focus and emphasis is applied to green and smart energy innovations. Methods of consumption, distribution and production are all in the midst of transformation, altering our relationships between consumer and provider.

To help you understand what’s in store, Innovate UK have rounded up their predictions for the future of energy.

Distribution and production of energy will be localised

Today, much of the UKs energy comes from fossil-fuel based power plants that are large-scale, supplying to a huge number of homes and businesses. In the coming years we’re likely to find thousands of smaller scale producers creating low-cost, renewable energy around the country. This will allow the trading and production of low-carbon energy on a local scale. As a result, regular consumers will have more control over their usage rather than relying on inefficient and environmentally-damaging power plants.

Why is local better?

Simply put, localised energy means less waste. Excess heat energy can be used for homes and business, and with less distance to travel along power lines than large power plants, less energy will be lost. Currently, centralised power stations are only 50% efficient.

Increased flexibility from ‘The Internet of Energy’

Thanks to modern, smart and connected digital systems, suppliers and consumers are set to have more control over their energy usage. The ‘Internet of Energy’ is a means of reducing inefficiencies in consumption by monitoring where it’s needed most around the house or place of work.

What will this mean in practical terms?

For everyday homeowners, it allows for new ways of altering energy usage, increasing efficiency and flexibility on a day to day basis. Many modern appliances are interconnected. When handling surges in demand, these appliances will lower their energy usage where required, meaning the demand from the national grid does not increase. For example, if you have an electric car plugged into your home, you’ll be able to sell its stored excess energy back to the grid, making you a profit.

The changing energy consumer role

A big change that is expected in the coming years is the role of the consumer within the energy market. Regular households are likely to have more control over when and how they use their energy, with more choice over where it comes from, its efficiency, and the places it’s used. Rather than being on the edge of the system, they’ll be able to ensure their energy costs do not exceed their budget. Prices won’t simply be up to the provider.

How will this affect energy providers?

In order for energy to become part of the circular economy, there will need to be a shift away from buying energy only in units as kWh. Energy is set to be seen as a service, rather than just a supply. Consumers will be able to choose from a variety of companies offering different values and prices for the energy they generate.

Keep up to date with Innovate UK

Looking for more updates, insights and projects in the world of technology and science? Be sure to follow Innovate UK on Twitter and browse their YouTube channel.