Energy’s Digital Dilemmas: Shining the light on the complex choices ahead
The extremes of mid-summer and mid-winter provide food for thought on the significant benefits digital technology has brought to the way we consume energy. While one half of the planet turns on energy-guzzling coolers to stave off the searing heat, the other half turns up the thermostat to keep warm as the temperature outside turns well below zero. But people on both sides of the planet have one thing in common: whether they’re turning the heat down or up, they benefit from the increased energy efficiency, visibility and security that digital technologies have made possible in recent years.
But we are only at the start of our digitized energy journey. Long-promised technologies, including AI and IoT, are now maturing rapidly and combining with well-established capabilities to open up breakthrough opportunities. As billions of objects and people connect to the IoT and AI derives knowledge from the wealth of data produced, a new architectural landscape will emerge for Energy & Utilities (E&U) companies to create an intelligent and collaborative computing continuum. Further into the future, Digital Twins and smart materials will allow physical systems to use context-driven simulated outcomes to respond to that environment in real time, supervised in the field by workers using enhancing technologies such as augmented and virtual reality, wearables and robots.
Data sharing: Energy’s weighty Digital Dilemma
Coming back to where we are today, the insights derived from the data coming from smart meters mean both energy providers and energy consumers have real-time visibility of energy usage. Utilities can respond more quickly and more accurately to energy demands while their customers benefit from a wide variety of useful services, most significantly around energy efficiency and personalized tariffs.
While smart metering data provides a whole wealth of benefits, just because we could exploit it further, it doesn’t mean we should. Digital data can reveal all sorts of insights about us as individuals: how we behave, our likes and dislikes, and more. But how do we ensure we make use of those insights in a responsible way? E&U businesses could share their customer consumption data, but that might be at the cost of losing customer trust. Customers are already concerned about the privacy of their consumption data to a point where they feel inappropriate or excessive exploitation is intrusive. And therein lies the first ‘Digital Dilemma’ for E&U businesses – deciding the fine line between what they can and should do with the increasing volumes of consumer data.
Another Digital Dilemma lies in the adoption of digital technologies that, on the one hand, threaten customer disintermediation while, at the same time, help improve customer intimacy. Emerging decentralized ideas around collective self-consumption and blockchain-based microgrids, along with new players in the E&U value chain, are challenging traditional E&U players’ intermediary role. But a collaborative platform approach that moves E&U business models from volumetric selling to more intimate services around energy is the best opportunity for mitigating this threat. To maximize their value, these platforms must integrate – and share their data – with other companies and entities, such as smart cities, electric-based transport networks and Industry 4.0 factories. E&U businesses must tread carefully, building the trust with their customers that will allow them to share customer consumption data in a way that brings value to one and all.
Balancing the possible with the permissible
The relentless rate of technology change is leading to other even more complex choices. While these are positive business choices, they might also be considered the Digital Dilemmas that must balance what is possible with what is permissible. How do businesses embrace clean distributed renewables and storage to offer the strong positioning that customers are demanding on topics like green energy while, at the same time, optimizing their legacy energy networks? How do they automate existing processes to improve efficiency without creating labor unrest? Or attract the new digital talent they need as their specialized traditional workforce ages? How do they embrace affluent energy prosumers on one side while addressing energy poverty on the other? And how can they take advantage of extensive use of AI while complying with stricter ethical and regulatory constraints?
With the environmental and economic sustainability of energy is fundamental to global civilization’s long-term progress, energy companies need to think about how they balance what digital makes possible with what their operations, shareholders, customers, regulators and wider society find permissible. Even mere survival in a digitized energy world depends on understanding and developing strategies to resolve E&U’s emerging Digital Dilemmas. However, if they take the right approach to addressing the challenges of the fast-changing energy landscape, energy companies will find novel business opportunities that are compatible with overall sustainability.
Our latest Journey 2022 ‘Resolving Digital Dilemmas’ report, researched and written by the Atos Scientific Community, explains more about how energy and utilities can thrive in this complex environment.