The utilities landscape is changing. Experts predict that the global population will increase to 10 billion people by 2050. Entire countries depend on the constant availability of power. We need to create groundbreaking, resilient strategies to safeguard energy flow. That’s why organizations continue to search for alternative energy sources and develop new ways to distribute energy.
At the same time, the balance of power in the utilities industry is also changing. Environmental and cost concerns drive consumers toward renewable energy sources. Changing laws and novel opportunities are attracting new companies to the industry. Although the path might seem complicated, it is navigable.
The growing role of technology and digitization
In this digital economy, technology is one of the most important drivers of innovation. Thanks to our application of technology, a digital energy network is emerging. It connects established and new power producers, retailers, consumers, and prosumers. Energy is no longer produced at one central point. Instead, it’s produced at many different points that are located close to consumers.
The following elements make up the digital energy network:
- The smart grid monitors and regulates the supply and demand of power. It also communicates data about the supply and demand to the digital control center. Robust technology enhances the flow of energy and allows the exchange of information in two directions. Real-time in-memory computing provides the capacity to track and control current usage. It also predicts future bottlenecks by analyzing and interpreting data.
- The digital control center tracks the supply and demand of power. Based on data input, it either distributes power to consumers or stores it for future use.
- Energy storage facilities can be new construction or retrofitted plants. They store surplus power until the grid taps into it during peak demand times.
- Power originates with a variety of power generators. These include fossil power, hydropower, wind power, nuclear power, and solar power generators.
- Transmission systems deliver power from various generators to distributors and retailers.
- Distributors and retailers deliver electricity to consumers.
- Consumers are industries, smart cities, smart homes, and EV charge points. They send back data via the smart grid to the digital control center.
There are also independent communities of prosumers who generate their own electricity. These prosumers don’t rely on the smart grid for their power. Nonetheless, they form a part of the digital energy network. They rely on retailers to provide the equipment and systems they need to generate their own power, and some sell power back to retailers.
Continuous improvements needed
In this digital energy network, utilities companies need to optimize new business models based along the four different types of operations in the field: energy generation, distribution, demand/supply balancing, and omnichannel retail.
For established companies, this means a drastic rethinking and restructuring of their business models. It also means they must reassess how to generate revenue from their products.
For new companies, there’s a wealth of opportunity to break into the market, from providing renewable energy to developing new applications for distribution improvement to energy monitoring opportunities. And there’s the need to provide sustainable and affordable solutions for the end consumer.
Companies need continuous optimization because technology evolves at a rapid pace. Also, according to Harvard Business Review, the adoption rate for new technology is increasing. As soon as a company rolls out one application, developers get to work to improve upon it. Companies that don’t invest in continuous optimization are likely to fall behind their competition. Those who do optimize will likely create market opportunities and offer value to customers.
In conclusion, the digital energy network is a growing, evolving structure, and it will keep developing as the market responds to internal and external pressures.
To learn more about digital transformation for utilities, view Utilities. Reimagined for the new economy.