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This post was written by Ashiss Kumar Dash, global head of services, utilities, resources, and energy industries, Infosys.
Energy and utilities companies have made a somewhat delayed entry into the digital world — in relation to peers in other industries like retail or even banking. But now the dual trend of energy transition and decentralization is creating a new paradigm in energy management, generation and consumption that is overwhelmingly digital. As part of energy transition, the electric utility industry is making massive investments towards upgrading the grid and making it smarter to achieve three ends to support a variety of fluctuating renewable sources, democratize generation, and manage bidirectional flow of energy.
Energy companies are also having to switch to a decentralized system, producing energy closer to where it is consumed instead of a central location. And this must be secure, predictable and reliable.
These challenges — whether decentralization, building microgrids, or predicting demand-supply dynamics — can be massively impacted with digital solutions. After decades of being in a commoditized business, utilities have a chance to differentiate themselves, not through their energy or electricity supply, but through digital expertise, which influences everything from how much customers pay for energy to how they experience these services. Data is integral to this opportunity; for instance, utility companies need to know who is producing decentralized energy, how much of it is available for distribution and match that to surges and dips in demand. Data trends can help point to the answers.
But how can energy companies, which are not fully digitally transformed, be expected to compete on technology? To help them in this journey, digital services companies are taking on the role of digital energy orchestrators, providing AI and analytics-based solutions to stabilize grids, predict supply of energy from fluctuating sources, and improve overall customer experience. Digital platforms are also accelerating innovation that can fundamentally transform how the industry functions. To the credit of the regulators in most countries, the need to make progressive efforts is being emphasized more than ramrodding a slew of impractical regulations. Digital technology is suited for precisely this agile build-up of progress.
News that made the rounds earlier this year, was of the global energy company bp exploring avenues to deliver Energy as a Service. They brought together their strengths in energy and mobility and amplified it with digital technologies to create an AI-enabled EaaS offering to manage energy assets and provide low-carbon energy (electricity and heating/ cooling) as well as low-carbon mobility to large campuses. If their pilot serves them well, plans are in place to offer the service to industrial and business parks, and then to towns and cities, opening up a new source of differentiation and revenue for the energy company. And, more importantly, leading the way in sustainable energy.
Another interesting turn of events is that of a North American energy behemoth onboarding a new grid-scale wind or solar energy plant every month, month on month! They are relying on a digital technology partnership to help with onboarding data systems and to also run the analytics for these implementations. The company is exploring ways and means to take a set of very comprehensive offerings for electric vehicles and also to scale solar energy storage with digital advances.
As recently as earlier this month, Southern California Edison announced the country’s largest electric vehicle charging infrastructure project by any utility company, for installing nearly 40,000 charging points over the next 5 years. The company has capitalized on a new opportunity — it will install and maintain the supporting EV charging infrastructure — to differentiate itself. This will also give it access to new customer data from the charging stations, such as the type of car they own, how much they travel, when they may need recharging, etc. Digital technologies are at the heart of this initiative.
In fact, we launched our Energy Innovation Centers in Houston and London to help more enterprises explore and navigate opportunities in this realm.
Clearly, the path to zero is digitally paved.
The energy sector is being reshaped by two major trends — the transition to non-fossil fuel resources and the decentralization of production and distribution. Digital technologies, such as AI/ML and analytics, are playing a big role in enabling the industry to leverage these shifts. There are both yet to be imagined and well-defined new opportunities to be had — for revenue generation and differentiation — as a result of these trends; and the game is technology-driven. It is impractical for energy companies to go alone, but there are technology providers with robust platforms and solutions that can help them run their operations so much more efficiently, as well as to explore deeper for value. Focusing on creating and distributing greener energy while leaning on a partner for the tech, makes more sense than ever, today.
Ashiss Kumar Dash is the global head of services, utilities, resources, and energy industries at Infosys.
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