Why is energy behind the digital curve?
The energy industry is moving full steam towards digital transformation, but the penetration of digitalisation nevertheless remains shallow, certainly compared to other industries. Many energy retailers, (renewable) energy producers or grid operators still run their core business based on monthly dashboards and ex-post data analytics, while the operations of tomorrow react in real time to demand, such as electric vehicles and RES volatility.
Two key enablers for the digital transformation process are data and technology. Data is already recognised and valued as a crucial building block in the creation of a smart energy system. The availability of operational data from across the energy chain is maturing, and it already plays a role in informing decisions around sustainable infrastructure planning or is recognised as the future when it comes to the smart grid. However, obstacles presented by legacy IT systems and a scarcity of workforce skillset leave the sector unable to create or access the technology platforms required to unlock the value of the data they already have within their systems, let alone any coming in from outside their own boundaries.
Take smart meters for example. As stated recently by the European Commission, there has been a 72% roll-out in Europe for electricity. But while most utilities recognise the benefit of smart meter data analytics for improving billing, grid management and electricity trading, they struggle to extract any real-time value from the data due to outdated technology and must wait for up to a month at times to even get an overview. As a result, customers are still not seeing the real value of smart meter use, which retailers will only be able to deliver when they leverage the smart meter technology platform to create new user-centric digital services which go beyond a simple app showing consumption. Beyond the technology, there are also challenges in the exchange of data itself.
Despite the move towards integrated end-to-end services from generation to consumption, most energy data are still fragmented and siloed. As the industry further diversifies, branching into new sectors such as smart mobility, this fragmentation is likely to worsen unless forward-thinking companies realise the solution for cross-sector collaboration.