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Experts speak about Digitalization of the Energy Sector and the challenges

3rd Digitalization for Energy Sector
2 - 4 December 2019,
 Amsterdam, The Netherlands

The European Energy sector is in the process of transition towards clean energy and higher efficiency. Digitalization is at the very center of this transition and no organization in the industry can afford to avoid it. As legacy systems get replaced and integrated with digital platforms, the huge amount of data from the systems and customers helps the industry in a wide range of challenges, from fault prediction in grid networks to the delivery of personalized energy to households. The huge volume of big data being handled by the industry requires the leadership to make complex IT infrastructure, security, and design decisions, requiring a whole new set of skills and expertise. Has the industry prepared itself for these new challenges?

The risk-averse nature of the energy industry has been a major roadblock in achieving digitalization for many organizations. However, the industry is now stepping up and embracing the digital transformation owing to the obvious advantages.

Jorge Simões - Head of the Digital Factory from EDP, Portugal commented, “Most energy companies (and utilities in particular) are risk-averse by nature and foster a culture of risk-aversion, where failure carries a highly negative charge. The digital realm, on the other hand, is highly iterative and failure is part of the growth process. Failure, in digital terms, not only has often zero cost, it is a positive and necessary step in the journey to a solid outcome. In order to improve digitally, every energy company needs to accept this paradox and embrace the challenge to change its culture from within. This cannot be mandated or outsourced – it’s a long and winding journey, as all cultural transformations are, but essential to achieving digital maturity. “

According to Simões, being ‘more digital’ entails two equally complex and important transformations: a cultural transformation focused on people and processes, and a technological transformation focused on enabling integration between legacy systems and new digital platforms and tools. These two challenges are closely intertwined and should be orchestrated as such. Equipping and mandating his/her leadership team to carry out this major transformation should be at the top of every CEO’s priority list.

Michael Kranhold - Director Customer Management from 50Hertz Transmission, Germany also agrees to the need for this cultural change in the energy sector and that the top management needs to lead the way.

He said, “People in the industry need to open themselves to new ideas and processes instead of defending the old, used-to-have processes. The top management in energy organizations needs to lead the way for these changes to happen.”

The future of the energy sector depends not just on the energy that is produced and distributed, but also in the huge volume of data they sense, collect, create, store and communicate to the whole ecosystem. Effectively tapping into this ‘big data’ can unlock much more value for the energy industry and its ecosystem. 

According to Klaas Hommes - Business Developer, TenneT, The Netherlands, “We need to be aware of the fact that data will play a crucial role in the near future and make it available for those who can take advantage of it. Of course, always with respect to GDPR.  In the near future, the energy sector would need to have a dialogue about unlocking data sources in a way that parties can have access to data based on their roles and responsibilities or the customer mandate.”

The digitalization of the energy industry also has the potential to revolutionize the way the industry interacts with its customers. Customers today are used to having a seamless digital user experience with almost all the products and services they use; and the energy sector cannot afford, in this age, to be any different. More and more utility companies are moving towards a more customer centric-approach; coming up with mobile applications and web portals where their customers can access all the information about their energy consumption, billing, peak-times, etc.

Philipp Schmidt-Partner and Jette Anders - Manager & Customer Experience Lead, PwC, Germany advocate shifting to a customer-centric culture while fostering new ways of working with a focus on continuous improvement. According to them, “organizations should focus on customer needs and explore what they want, instead of implementing products the organization thinks are best for their customers without actual customer involvement.” At the 3rd Digitalization Forum for Energy Sector 2019, the duo from PwC will conduct a hands-on workshop, Awake Your Customer Experience Potential - How to Transform to A Customer-Centric Organization that takes the participants through joint exploration of the success factors for good customer experience.

Michael Kranhold - Director Customer Management, 50Hertz Transmission, Germany is of the opinion that the energy industry needs to take a leaf or two out of the way the IT industry approaches their problems. He said, “to achieve digitalization, the energy sector has to adopt the agile methodology often used by IT-developers, resulting in lesser bureaucracy and higher speed. The industry also has to invest in reliable and robust IT-Infrastructure, networks and IT-support.

The digital transformation of the energy sector is sure to bring improved productivity, reliability, and operational efficiency, while also using insights from advanced data analytics for better asset management and decision making. The 3rd Digitalization of Energy Sector 2019 brings together experts and thought leaders from the European Energy industry to discuss the challenges, approaches and the best practices for the digital transformation of the industry.