The Rise of a Decentralized Energy and Utilities World
In launching our Digital Vision for Energy and Utilities opinion paper we wanted the UK’s leading voices in the sector and Atos industry experts to come together and compare views on the key considerations relating to the rise of a decentralized energy and utilities world as well as to gain their feedback on the paper.
Atos hosted a roundtable session where I recently spoke alongside Dermot Nolan, CEO of Ofgem, and Antony Walker, Deputy CEO of techUK, and representatives from across the sector. What took place was a stimulating discussion with the focus on the significant operational and competitive challenges converging in parallel on the marketplace, with particular consideration paid to the central role of new and emerging technologies in the rapidly evolving energy and utilities space.
Rise of the ‘prosumers’
One clear example of decentralization is in connected homes and vehicles. They often employ energy generating devices and are giving rise to a new phenomenon in which utilities customers are both consumers and producers of energy. These ‘prosumers’ will increasingly see companies adapting to them and this shift in service and lifestyle will be further driven through ‘time of day tariffs’ and the rise of faster consumer switching between providers, which will only become quicker and simpler.
This continued growth and impact on energy grids raises profound questions about whether this rapid and additional requirement can be managed effectively. The forecast rise of electric vehicles usage presents both a challenge and opportunity for producers on how the huge increase in demand for electricity will be catered for and how and who will provide and maintain the associated charging points and related smart services.
To participate in an energy-smart future we need to invest smartly too. Mass-market adoption of new technologies driven by IoT and provision of data will only come provided the conditions are right and there is trust between consumers and utilities providers around use of their data. Using these masses of data sensitively, whilst making sure clear benefits are demonstrated in return to the customer, will be necessary to engender trust between companies and their customers.
Fundamental changes supported by technology
As Antony Walker noted at the roundtable discussion, if we compare the industry with the telecoms sector almost 20 years ago, the energy market is now seen to be in a similar position with fragmentation and new entrants shaking up the status quo. Long established business models are being redefined. And it is the thoughtful, tailored and applied use of technology which plays a central role in helping navigate this period of flux and for pathways to growth to be realised.
Even more fundamental change such as decarbonization of the UK poses many, as yet, unanswered questions. The good news is, here again, proper use of available digital tools and support, including through a semi-autonomous and ‘as a service’ environments, can allow energy and utilities organizations to research and develop new products and capabilities and bring them to market in a fraction of the time.
Despite the significant recent news that the UK reported its first full week of non-coal energy output since the industrial revolution, many more aspects of energy usage such as heating in our homes need to be reconsidered with ‘digital’ solutions integrated into this future thinking alongside engagement with customers in a trusted manner.
Innovation and the open consumer
Today we have the digital toolkit to drive transformational change for upstream and downstream providers; IoT sensors, advanced analytics, edge computing and AI. It is time to embrace this and collectively manage and shape how this is happening all around instead of letting change itself define destinies. This involves government, regulators, energy industry participants, suppliers and ‘prosumers’ to work together.
Ownership of data, advances in technology and consumers trust and confidence in the market are all key when building a picture of what the rise of decentralized energy and utilities sector really looks like. And there was one clear point on which all attendees at our roundtable could agree: the industry needs to be prepared to welcome and adopt constructive innovation in all its forms in the race towards industry transformation while remaining competitive continues.