We are approaching the end of an extraordinary year in which COVID-19 turned life as we know it upside down. We've all had to face challenges and deal with small and big changes in our environment. The energy sector was no exception, with worldwide deadlocks, suspension of projects and facilities, or postponement of tenders. However, the global pandemic has also boosted creativity, digitalization, and the creation of new services. So what can we expect to see in energy next year?
1. Gains customer focus
As the market situation becomes more and more volatile, customer focus will be key to maintaining and building loyal customer bases and eventually maintaining healthy business. Not long ago, most people didn't really care about energy providers. Once they sign a contract and are happy to never think again. However, these customers are becoming increasingly rare. People have become accustomed to high-quality digital services in many other areas of life, and their expectations for transparency and flexibility are now much higher. As a result, customers are more likely to switch energy providers. The needs of end users are also changing. For example, the increase in electric vehicles and the possibility to use their batteries as energy storage or special solar panels and heat pumps require more holistic solutions. It's time for energy companies to speak up and put customer focus at the center of every decision. Customer feedback and insights will increase acceptance of new tools and validate underlying assumptions. What's more, customer focus will help energy companies close the delivery gap, maintain, grow and improve their customer base, and ultimately stay up to date in an emerging market.
2. Smart grids full power ahead
More efficient grid operations and smarter grids are an important element in the transformation of the energy sector. In the next decade, Germany plans to invest around € 50 billion in infrastructure to provide more efficient grid operation and smarter grids. However, improving the infrastructure alone will not do the trick. IoT and technologies such as asset tracking devices, surveillance aircraft or satellites generate a lot of data. Sharing this data with all relevant stakeholders and empowering them to find the right answers to the right questions will be the key to making the grid operation more flexible, flexible and sustainable. In addition, applying analytics to large volumes of data generated in the energy and utilities industry can provide unique insights into customer usage patterns. This information provides demand forecasting and effective energy management, but can also help prevent fraud, reduce loss, improve compliance with legal requests, and improve customer service. Using data correctly will increase user satisfaction and ultimately help companies convert data into money.
3.The dynamics between producers and consumers continue to change
Interaction between manufacturers, consumers, and network providers is becoming more collaborative. In its latest report, the German Solar Energy Industry Association (BSW) stated that more than 100,000 new consumers entered the market between February 2019 and January 2020. These people are both producers and consumers of energy, eg. homeowners and industrial facilities with photovoltaic panels on their roofs, which makes them more autonomous. Every consumer is a potential energy manager that must collaborate with consumer, incumbent generators and grid providers, and their impact increases with their numbers. But with an increasing number of "micro assets", how can power companies take them into account when production and demand are still very volatile? Smart meters come into play here. Smart meters help bridge the gap between consumers, manufacturers and grid providers. Consumers get an overview of their consumption profiles and can change routines or infrastructure eg. storage facilities. For manufacturers and grid providers, smart meters provide valuable user insights and form the basis for building demand response at scale.
4. There is a greater need than ever for automated and AI-powered energy management
Increasing amounts of intermittent power generation result in shorter lead times and increase the need for near real-time management of both production and demand. Analytical solutions provide the real-time analysis needed to optimize operational performance and decision making. As a result of shorter lead times in the market, the focus in energy management is shifting from long-term planning to near real-time responsiveness to changes. This means bidding and distribution is highly automated and augmented with data and AI for both power companies and companies operating in energy-intensive industries.
It requires imme processes. Increased adoption of cloud platforms in the energy and utilities sector is expected to have a positive impact on market growth. However, the market faces major challenges regarding data security as well as privacy concerns. In addition, many energy companies lack qualified analytical expertise while dealing with the integration of new solutions into legacy IT architecture. To balance these limiting factors and profit from expected market growth, energy companies need to invest and increase their IT capabilities.
5. Digital and physical will evolve together
Hardware and digital technologies will begin to evolve together, and both will need the other to drive the necessary changes in efficiency and sustainability. Traditionally speaking, energy has been a hardware-heavy industry with a strong focus on physical processes. Improvements in hardware and how it works will be critical in the future as well as in the past, but not enough to make a difference. Energy companies aiming to be more efficient and sustainable will have to focus on digital as well as hardware. Software and data analytics will be needed to support future developments in generating, distributing and consuming electrical power.
What does this mean for energy companies?
To keep up with constant changes and evolving demands, energy companies will need to focus on their digital competencies. They will need to invest, generate knowledge and compete for talented IT professionals.