Utilities don’t change, right?
You push a button and the lights come on, or the gas is delivered, or the water flushes.
What’s there to change?
WRONG…..!!!!!! – Everything is changing.
Much the same as if in the mid 1990’s I would have told you that you will be buying your milk at the local gas station, and that the gas station will be taking on the grocery store as competition, or that the grocery stores would compete with the banking industry by offering the opportunity to withdraw cash with no foreign ATM service fee, or that your mobile device would replace your Walkman (remember those?), your iPod, your camera, your scheduler, your calculator, your rolodex, and so much more.
It is stated that there are currently more mobile devices in the world than people with an estimated 8.6 billion devices versus 7.3 billion people. With and estimated 5.8 billion mobile users worldwide, that means almost 80% of the planet’s population are mobile, and they have an average of 1.5 devices each. Technology that is digitally connecting the population, bringing new competition, improved efficiencies and changing the way we do everything.
Now that’s digital transformation.
By 2050, the global population is projected to be ten billion people. Some experts say the demand for electricity, natural gas and water will double or triple as billions of people join the digital economy, and the use of energy and water will grow while vehicles and mass transit go electric. One thing is clear – the digital economy needs clean, dependable and affordable electricity.
This should be a great outlook for power generators, distributors and retailers, but de-carbonization, deregulation and decentralization are disrupting the century-old utilities hierarchy. We see a “Digital Energy Network” emerging that reflects new structures of power generation, transmission, distribution and retail. It will foster new business models and processes and transform work in a competitive and collaborative digital economy.
The consequences are dramatic. Proven utilities business models based on trillions of dollars worth of plants and grids collapse. New market entrants, such as Google and Tesla, disrupt the value chain. Rapid technical and social innovation puts new capital investments at risk. Consumers, communities and companies go “off the grid” with new wind, solar and storage technology.
The industry is currently balancing the efficient operations of its existing infrastructure with the need to adapt to the volatile market environment. Leading utilities are re-evaluating their physical assets and customer relationships to:
- Reimagine business models to find new revenue and profit sources by offering innovative supply, load balancing and smart home/business energy services
- Reimagine business processes and use digital technology to optimize business outcomes by converging information and operational technologies
- Reimagine the role and structure of the workforce to support future business by incorporating wearable technology, 3D printers and geospatial technologies
“Reimagining” the utilities business will shape the Digital Energy Network that overlaps and complements the power supply system. All participants – utilities, consumers and new non-utility players – will use digital innovation to anticipate real-time demand and supply, operate self-healing grids, and innovate the customer experience.
On April 11-13, at The Hague, The Netherlands, we will have the International SAP Conference for Utilities where utilities from around the world will discuss how they are reimagining their businesses and digitally transforming their organizations, and how they are addressing the Digital Energy Network.
We look forward to seeing you at The Hague