How do our analogue energy systems become data-powered innovators?

Like many of the systems that underpin the modern world, today’s energy networks reflect a long and ongoing process of upgrades and improvements. Adoption and use of new technology has tended to be evolutionary or sporadic, and major changes to an infrastructure that connects a whole country are understandably difficult. Like many sectors, energy is still some way off realising its full “digital transformation”, but the outlines of a vastly more effective network can already be perceived.

Today’s energy networks were designed to meet usage patterns and preferences that are also rapidly becoming out of date. Take the growing number of countries’ commitment to net zero targets. Even if entire populations shifted to electric heating and electric vehicles, as it stands, most countries energy networks couldn’t possibly meet this new level of demand for electricity.

Generation has diversified. Grids and networks need to be able to balance demand and incorporate a growing range of energy sources, while meeting increasing overall demand for power. Without a deep level of digital integration from initial generation through to end consumer behaviour, it won’t be possible to meet these new demands. The baseline requirement will be for the sector to make all data interoperable across every asset. This will be a generational investment, but it will transform what the sector is capable of tomorrow.

The industry is definitely at a crossroads, aware of the need for change, cognisant of the opportunity but unsure how to proceed. And as we’ve seen in moves from the UK’s Energy Data Taskforce, regulation is also likely to accelerate the push towards to digital energy networks.

A new mindset: invest, connect, innovate

Almost every future requirement or expectation of energy services and performance is reliant on a deep implementation of interoperable data. As we’ve already seen in countless other sectors, when data is combined it has the potential to become immeasurably more valuable.

When the smartphone first appeared, industry saw it as a very innovative take on a phone. A decade on, what we actually see is that the device was the start of a personal data revolution, changing everything from telephony to the hotel business, the taxi business and created a multi-billion dollar app industry that never existed before. The energy industry sorely needs to have its own ‘smartphone eureka’ moment.

Digital requires a new mindset. Today even sectors as risk-averse as banking have worked together to produce innovations like the Open Banking standard, bringing interoperability to financial information and putting more control in consumers’ hands. Candidly, the energy business needs its own quantum leap, where users, generators and innovative new services connect at last. The lesson is: you can shape your own future success in the digital era, if you’re prepared to invest in building the network and shared data ecosystem you want to benefit from.

The net zero network… thinks about the future

The push for net zero across economies clearly requires end-to-end digital control of energy networks. To get there we will need to fundamentally reorientate how networks approach supply. Small consumer-focused steps have been taken. Domestic smart thermostat systems claim to be able to save you money by learning your heating and lighting preferences and hooking them up to your smartphone. This ends in lower use, less waste and is good for society as a whole. But none of this product data connects back to the grid or the energy companies, so at the moment all benefits are personal.

The vital shift from today’s over supply ethos to demand-responsive generation will need right time (not necessarily real time) data, and extensive use of advanced digital technologies such as machine learning and artificial intelligence. Such a system is more than possible but will need the industry to unify, standardise and interconnect its data first.

Overdue innovation

As other industries have already discovered, with digital transformation it’s less a case of ‘if’, more a case of when and how to invest – in order to get a return on that investment. Two trends continue to converge: rising consumer expectations around control and price, plus government regulation that targets innovations which can help countries to reach net zero targets. Energy can become a highly innovative, predictive, net zero network, one that is truly an engine of twenty first century civilisation. The time to invest is now.