The evolution of both the energy transition and the metaverse continuum will be supported by a revolution in data. The energy industry is undergoing a huge digital transformation, where all new assets deployed across the energy value chain – in generation, transmission, distribution, at the meter and in customer premises – are all connected.
Better sensors create more accurate data, which feeds advanced analytics that create deeper and more meaningful insights. New data ecosystems will evolve that support new business models, which require new approaches to data architecture that ensure interoperability.
of utilities executives believe programming the physical environment will emerge as a competitive differentiation in their industry.
The digitally enabled grid
How will these new sensors be different? The biggest change will be the creation of software-defined power networks, where the intelligence embedded in grid-connected assets is functionally separate from the hardware. Hardware – anything from actuators, meters, EV charging stations or electric appliances – becomes increasingly commoditized, and the value shifts to software.
of utilities executives report the number of IoT/edge devices deployed in their organization significantly or exponentially increased over the past three years.
This digitally enabled approach is a vital element to the energy industry’s future. Large grid operators could potentially be connected – or at least send pricing signals – to hundreds of millions or even billions of devices. This can’t be done without significant improvements in standardization and modularity.
The residential ecosystem
Within five years, significant change will occur behind the meter. The current transactional relationship between a utility and its residential customers will transform to a partnership with much greater interaction. New ecosystems and technologies will develop to help consumers better manage their power consumption. Importantly, all these new business models will rely on data. This data will transform the way utilities engage with their customers, shifting from volume-based commodity sales to service-based offerings that help reduce energy consumption.
Improved knowledge of the technology (39%) is among the top three factors that would increase the value of using emerging technologies such as AR and VR for consumers.
But energy efficiency is just the tip of the iceberg. Utilities will use predictive analytics to identify if a customer’s solar PV, storage or household appliances are faulty. They will provide maintenance services and offer replacements when assets reach the end of their lives. Working alongside aggregation partners, they will help householders optimize their investments in different assets, charging EVs or in-home batteries when prices are low, and selling power back to the grid when prices are high. Most importantly, this is all automated. Consumers aren’t drowned in the complexity of day-ahead markets, they are just provided with the cheapest and greenest power available.
Software-defined technology is already used in ChargePoint’s EV chargers1 in the Netherlands. Its software-defined hardware infrastructure makes the hardware configurable to meet the changing requirements of commercial fleets. The software-defined approach makes charging infrastructure more flexible and its use will become much more widespread. Third generation smart meters will be software defined, creating a more versatile and flexible connection point to the home. By separating intelligence from hardware, the meter can be switched from a measuring device to the smart interface between a utility and each customer.
This will also apply to devices in the grid itself, where software is used to emulate hardware devices. ENEL is a leading example, with its Gridspertise Quantum Edge Device2. A vital part of the project’s success is the open-source community that is built around the software-defined technology.
Commercial & industrial requires a different approach
Commercial customers will move faster than residential. Driven by corporate ESG targets – as of August 2021, almost one-third of the 1000+ largest listed European companies aim to reach net zero by 20503 – the relationship between utilities and corporate customers must change rapidly. Some utilities will become energy service providers, where contracts are based on how much money a utility can save its customers. Utilities and their partners will retrofit customers’ buildings and equipment, and monitor and optimize their energy performance.
Over the next five years, commercial fleets will present a huge opportunity for utilities. They will electrify faster than all other transport sectors. This presents utilities as many challenges as it does opportunities. The new loads will be a welcome new revenue stream, but capacity constraints will require smarter approach to EV charging. Utilities can optimize commercial fleet charging to ensure they charge when prices are lowest, and also to export power to the grid when prices are high.
Network data creates a no-failure world
The world’s aging infrastructure needs trillions of investment to incorporate renewables. According to a report from BloombergNEF4, in Europe, the cost of switching to clean energy by 2050 will be $5.3 trillion. To manage the changing load profiles, existing transmission and distribution (T&D) equipment will be retrofitted with sensors. This retrofitting will be complemented with new technologies, which will be concentrated at the opposite ends of asset scale: at very large and very small scales. In the future, there will be significantly more long-distance movement of energy, for example using high-voltage direct current (HVDC) transmission cables or hydrogen pipelines. At the other end of the scale, smaller, community projects will alter the dynamics of the energy market at a hyperlocal level.
of utilities executives agree that “AI is becoming pervasive across my organization’s business processes”.
All this new connectivity and the data it creates presents utilities with an opportunity to leapfrog. That is because industrial internet of things (IIoT) and high-performance computing will revolutionize infrastructure management. With timely and accurate data, utilities can adopt more predictive approaches to asset maintenance. Over time, as algorithms improve, utilities will be able to swap out any asset before it breaks, creating a world of no failures. The much higher resolution of this ubiquitous sensing will enable much better outage restoration, where pinpoint accuracy vastly improves restoration times
of utilities executives agree that Augmented Reality will disrupt their industry in the next three years.
Embedded intelligence in operational technology (OT) components will also become software defined. This will allow utilities to take a more flexible approach to where data is collected and analyzed. In the short to medium term, much will be done at the edge. However, a software-defined approach to hardware will make it easier for utilities to fulfil the long-term goal of processing operations data in the cloud.
And the principles of software-defined technology can also apply to existing OT hardware. Additional devices will augment conventional OT components, like switch gear and breakers: these separate edge devices will emulate remote terminal units (RTUs), front end processors (FEPs) and routers in one device, and provide a software platform for innovative edge applications.
New data-related business models need new skills
Data scientists and technologists will play a vital role in the new utility workforce. Analytics is central to an energy as a service business model, and requires a different skillset to the current workforce. Rather than develop these skills in house, many utilities will strike partnerships with niche suppliers to accelerate the acquisition of these skills.
of utilities executives report that AR technologies will bring them improved operations in the next three years
of utilities executives report that AR technologies will bring them talent related benefits in the next three years
of utilities executives report that AR technologies will bring them increased revenue/cost savings in the next three years
The energy transition creates an opportunity to turn traditional utility business models on their head. However, these new business models will all be heavily reliant on data. The Programmable World is the foundation for energy delivery over the next century, from generation, through transmission, distribution and into customers’ premises. But data-focused business models require a data-focused culture. The challenge for utilities is to build the skills required to support this new world.