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Author's profile photo Markus Bechmann

Energy Transition Meets Digital Transformation – SAP Innovation Strategy for Utilities

Energy Transition Meets Digital Transformation – SAP Innovation Strategy for Utilities

The IPCC reports that limiting the global mean temperature increase to 1.5° C will require CO2 emissions to reach net zero by 2050[1]. This analysis is the foundation for policies like the New Green Deal in the EU, which also aims for climate neutrality by 2050[2]. Decarbonization of the energy sector is the major pillar for this because about 73% of global greenhouse gas emissions are directly related to the use of energy[3] for industry, buildings, and transport.

It is therefore no surprise that Renewable Energies are the fastest growing source of energy, contributing half of the growth in global energy supplies and becoming the largest source of power by 2040[4]. In most regions, wind and solar are also the cheapest source of electricity generation, even without subsidies[5].

This shift to renewables also fosters the growing number of Decentralized Energy Resources (DER). Renewables like solar, wind, or bioenergy are to a large extent generated by small local generation assets, which feed directly into the distribution grid. The intermittent nature of solar and wind causes challenges for the balancing of demand and supply in the power grids.

Also the demand side is changing with industrial, commercial, and household customers more and more generating their own energy and becoming Energy Prosumers. This causes a shift in utilities’ business models from pure selling of energy and water to becoming a full-service provider for energy prosumers.

Digital Transformation is both answer to the challenges of the energy transition and driver of new business models and services. With nearly everything becoming “smart”, utilities need a strategy how to manage the avalanche of data coming from smart devices and other sources and use it to feed their intelligence. At SAP, we call this the Intelligent Enterprise, which is enabled by integration of data and processes and innovation with industry best practices[6]. These industry-specific innovation topics cover the whole utilities value chain as you can see in the following examples:

 

Selected SAP for Utilities Innovation Initiatives

 

Energy Operations & Intelligence: Operators of generation assets need to manage fleets with a rising number of distributed energy resources. The operations and maintenance plan need to be aligned with market prices to optimize the ROI of the generation fleet.

Charge Point Operations: Operators of charge points need to manage the bookings, energy flows and financials of charging procedures.

Power Purchase Agreements: Optimizing an energy portfolio requires solid trading strategies to secure supply of (green) energy at lowest cost and minimized risk.

Advanced Distribution: Balancing demand and supply in power grids is becoming increasingly difficult with the rise of intermittent renewable energy resources. Distribution management needs to be connected with prosumer engagement.

Advanced Metering Infrastructure: Prosumer services and stabilization of the power grids require transparency of energy flows at the prosumers for operations of assets and commercial processes. Smart meter data must be managed, cleansed, aggregated, and made available for many different applications and use cases from asset centric to customer engagement and commercials.

Home Energy Management: With small scale solar power and batteries becoming more viable, the number of smart homes is growing from 140 million in 2017 to 482 million in 2025[7]. Utilities need to manage all processes around supply chain, installation, operation, service, and commercial processes around smart home assets and services.

 

Involvement and integration of start-ups is also an important component of innovation at SAP. Under the umbrella of our SAP.iO organization, we conducted a global screening of innovative start-ups in the utilities industry and created our SAP.iO Utilities cohort. The solutions of the start-ups will be available in the SAP AppCenter to provide more innovative capabilities integrated with SAP for Utilities.

 

Join our Innovation Track at the International SAP Conference for Utilities

At our International SAP Conference for Utilities taking place from May 18-20, we will have an Innovation Track on May 20 where you can learn more about our key innovations and SAP.iO Utilities cohort.

Please join me for my presentation “SAP Innovation Strategy” from 9:00 – 9:30 CET and “Breakout 1: Innovating with SAP.iO” during the Interactive Hour from 11:00 – 12:00 where you will have the chance to meet our start-ups. From 13:30 – 14:00 we will present you the “SAP E-Mobility Platform for Decentralized Markets”.

Further presentations will follow, stay tuned and check out the agenda of Day 3.

 

 

 

[1] Intergovernmental Panel on Climate Change, Global Warming of 1.5 ºC, at https://www.ipcc.ch/sr15/ (visited Mar. 30, 2021).

[2] European Commission, A European Green Deal, at https://ec.europa.eu/info/strategy/priorities-2019-2024/european-green-deal_en (visited Mar. 30, 2021).

[3] Max Roser & Hannah Ritchie, Emissions by Sector, at https://ourworldindata.org/emissions-by-sector (visited Mar. 30, 2021).

[4] BP, BP Energy Outlook (2019), 7.

[5] Michael O’boyle, Wind and Solar Are Our Cheapest Electricity Generation Sources. Now What Do We Do?, Greentech Media, Jan. 26, 2017.

[6] The Intelligent Enterprise SAP, at https://www.sap.com/products/intelligent-enterprise.html (visited Mar. 30, 2021).

[7] Jeremiah Lasquety-Reyes, Smart Home – Number of Households in the Segment Smart Home Worldwide 2025 Statista, at https://www.statista.com/forecasts/887613/number-of-smart-homes-in-the-smart-home-market-worldwide (visited Apr. 7, 2021).

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      Author's profile photo Raul Arenas
      Raul Arenas

      Markus- very interesting read. I noticed a white space under Charge Point Operations and SAP.io Utilities Cohort, perhaps there's an opportunity.