In this guide learn about monetising energy APIs, and their commercial value as a new channel for monetising existing digital assets and data.
APIs aren’t new. In fact, they’ve been around for quite a while, embraced fully by industries from all new digital platforms (e.g. Amazon, Facebook), via banking to telecoms as a cornerstone of digital transformation. Yet within the energy sector they are still largely restricted to specific internal projects lying strictly within the IT domain.
Over the last decade, APIs have evolved and scaled in volume, and their worth as a technological interface to facilitate agile internal processes and improve operational efficiency is well recognised. The challenge for the energy industry now, or rather the opportunity, is not in proving the value of energy APIs as an internal IT tool – that much is clear to see; it lies now in proving their commercial value as a revenue source in their own right, an integral part of a digital strategy, and a new external channel for monetising existing digital assets and data.
Before we look at how data, products and services can be productised via an API or web service, let’s remind ourselves of the basics.
An API is a tool that allows third-party applications to communicate with one another, making them vital to build application driven services. Further, information can be found in our helpful video.
For energy, the services available via an energy API tends to focus on real-time data – tariff data and other information related to the price of electricity, data from smart meters or home energy management systems, RES production data and sensor information, weather forecasting, market data and e-mobility data. The information provides valuable market intelligence and insight for players across the value chain, from traders and utilities to customers, connecting data on energy consumption with HEM and battery systems. As the energy industry becomes increasingly complex and digitally integrated, the ability to share this data through APIs is vital.
What makes an API monetizable?
If APIs are to be considered a digital product in their own right, they need features such as a product description, a usage licence(s) and pricing model just as any other product brought to market as part of an overall business strategy. It certainly isn’t the case that all digital assets available through a company’s existing API are naturally of monetary value to a broad external audience. As with any product, you need to look at the target audience and their specific needs – to whom would this data be of interest, for what pain point does it provide a solution and what value does it offer? Exclusivity in data and functionality is always a good place to start, but it is not essential if the offering still delivers a particular value to a particular audience.
As an example, an API providing a forecast of day-ahead electricity prices is obviously only relevant to industry players with short-term operations that enable or rely on them reacting quickly, not to largescale industrial consumers on 3-year fixed price contracts. Similarly, wind power forecast data has enormous value for an energy trader on an aggregated level as it influences the supply/demand balance but has little relevance to retailers, generators and the like. The key is to know and understand your audience.
Check out the re.alto API Marketplace and start monetising your energy APIs