What is the current trend?
In recent times, energy companies have had to establish strategic plans for the new energy and utility world shaped by decarbonization, digitalization and decentralized energy systems. As a result, their business models require transformation to adapt the changes and needs of the new energy landscape in which the use of electricity can be generated, monitored and resold by customers themselves, where modern market entrants from a variety of industries, including automotive, telecommunications, and resources (oil and gas) become increasingly competitive and where both physical and virtual networks are progressively determined by diversified data flows.
Originally power and energy companies focused on contract sales and marketing. However, optimization services are also offered for energy consumption management, initializing product diversification with technologies and multi-industry opportunities boosting their business growth.
Many market leaders in energy retail in Australia, including AGL and Energy Australia, have been seeking to reposition themselves in the new energy world by diversifying their product offerings and expanding beyond energy retail. For example, AGL launched the EV Smart Charging Trail in 2016, which enables a third party to manage electric car charging times of the day which avoids adding to the peak demand, as well as allowing the utilization of EV charging to help stabilize the grid (when a generator trips or to absorb solar generation to help balance supply/demand). In conjunction, the Virtual Solar Pilot scheme launched in 2017 provided customers who cannot install PV panels at their homes or businesses with access to solar savings1. In late 2019, AGL entered a new telecommunication and data-driving era with the announcement of the Southern Phone Company acquisition, followed by the new phone and NBN bundled plan launched within a year2.
Similarly, Energy Australia launched Go Neutral in 2016, a government-certified carbon-neutral product. Customers can offset emissions through carbon offset units from climate action projects at no additional costs3. Aligning with its decentralized production strategies, Energy Australia announced its innovative product Stack On in 2019 which offers customers with time and money savings by bundling utility, data and insurance services as a whole4.
Where to next?
With the constant, rapid technological evolution, the combined digital enablers, developing technologies and energy innovations are landscaping the utility market and adding value to its customers and society. This amalgamation shortens the distances between various industrial sectors. It reduces the limitations by providing innovative ideas and tools to assist in offering state-of-the-art products, enhancing interactions with customers, and improving their lifestyles.
As one of the digital enablers, Big Data analytics has been rapidly emerging in the past few years, allowing businesses to collect real-time data and make better, prompter decisions by applying sophisticated techniques. As an example, Artificial Intelligence (AI) enables decision-makers to automate manual tasks by performing recurrent, high-volume and computerized tasks at much higher speed. As a result, it benefits businesses with highly efficient operations, improved customer convenience and satisfaction, and maximized profit margins by cost reduction, process productivity, and greater product and service innovation. Similarly, cloud-based analytics enables significant cost optimization with its ability to capture massive data pools in real time; businesses can therefore analyze new sourced data set from the Internet of Things (IoT) via instant, in-memory analytics and implement efficient and precise decisions and product and service developments.
Concurrently, three major technology components are software, hardware and consulting services. Software refers to a wide variety of optimization programs used in operational platforms and network management such as cloud-based ERP system and Smart Grid system5. At the same time, hardware comprises energy storage systems and transmission performance systems such as EV batteries and solar panels, respectively. Both these hardware components are recognized as appropriate partial solutions to global warming concerns while developing an emerging renewable industry and economy. Meanwhile, enhancing network performance via optimization programs and software help mitigate the risk of network downtimes by gaining insights into the health of those hardware components and measuring and monitoring the key metrics of the devices.
Cloud services, as one of the greatest energy innovations, allow service providers to increase the processing power of a company through Cloud computing while safely storing sensitive data in online servers via cutting-edge encryption software. It promotes significant cost savings in terms of equipment purchasing, ongoing operational costs, and protecting Energy providers’ confidential data. Its high flexibility in terms of access and reliability improves both processing and workflow speeds. This, in turn, frees resources to implement conclusions drawn from data analysis, allowing greater agility to pivot in response to environmental factors.
Subsequently, specialized consulting provides a wide range of innovation and optimization services to industrial and public sectors, such as Cloud transformation, network and platform operations, IT solution management, voice services, cybersecurity and compliance. Through customized software installation and assigning tailored expertise to specific business issues or day-to-day system running and maintenance, core business functions can be focused on improved staff retention and morale while achieving significant cost savings and risk mitigation of data security and privacy protection.
To satisfy future customer demands and remain competitive in the market, existing energy market players ought to continue exploring their ability to consolidate strategies integrating software and hardware and transforming their business models into greener and customer-oriented operations by maximizing the utilization of forward-thinking technologies. This enhances their sustainability in the newly diversified utility world, and the economic benefits add value to their ongoing development and society.
Queenie is an experienced consultant in operations and digital transformation through process/journey design, ERP enhancements, robotic process automation and IT delivery management.