A tsunami of digital data has taken the power and utility industry by storm and there is no sign of this growth slowing down, writes Kelvin Ross
At almost every major energy industry conference around the world, digitalization is a hot topic of debate.
This was certainly true at Asia Power Week in Bangkok in September, and European Utility Week in Amsterdam in October.
According to Michael Schwan, Head of Network Consulting at Siemens, the path to really maximising the true potential of data is through data integration.
Ahead of European Utility Week, he said: “Different data sets are being fed into different systems which are often poorly linked. To get a better understanding of the business and its systems, it’s becoming increasingly important for a business to make decisions based on all data sets. This is where cloud technology solutions come in to play.”
He added that key changes should be made to gather all the data into one cloud solution, making it easier to link data and generate additional value from the combination of data sources. “Everyone thinks this will be very powerful. Many applications can make good use of these connected data sources. One thing being learned from the so-called Internet economy is that a bunch of applications can come out of data connectivity.”
Schwan says utilities can look forward to greater levels of efficiency from data integration. IT will only have one system to operate instead of many different silos and the operation of the energy system will be more streamlined since the data will provide decision-makers with a more holistic view of the business. He adds that a deeper insight and a higher level of transparency will lead to better decision-making.
With prosumers on the increase, a more simplified data processing solution will be key as they will eventually want to have the technical ability to participate actively in the energy market.
“As more prosumers connect to the grid digitally, there will be a greater need for digital solutions and cloud technologies can support this digital development.”
Cloud-based technology can provide more flexibility for the utility business. In the past, energy systems were dominated by primary technology but now, with digital technology, there is a higher capability of adapting fundamentals and functions. “Cloud technology makes it easier to focus on functionalities and streamline it to adhere to the needs of a specific market,” says Schwan.
“Utilities need to find out what solutions are beneficial and relevant to the future business which is growing in complexity. Utilities are already doing this in response to the growing complexity of their systems. Without change, they can’t operate effectively in today’s digital environment.”
As to whether the energy sector is undergoing an evolution or a revolution, Schwan says that utilities and energy companies “are looking at the Internet economy and see that things need to be done fundamentally different if they are going to be successful in the future. However, some of the changes cannot be made overnight.”
“Some power supply systems are over 100 years old and the changes involving this critical infrastructure have to be evolutionary. You can’t revolutionise the entire energy system overnight. It will take time to upgrade the primary system.”
At Asia Power Week, Schwan’s Siemens’ colleague Markus Lorenzini stressed that “the future will be digitalization. That is the global trend and the developments are getting faster and faster.”
Lorenzini is president and chief executive for Siemens in Thailand, Cambodia and Myanmar, where digitalization is playing a role in the energy sector. However, he stresses that the basic power needs of many countries have to be addressed first before digital technologies can be brought into play.
“There is a natural development for every country and it starts with electrification. If the electrification is there, then it goes into automation. After that automation comes the digitalization. That is the sequence and you cannot change the sequence. You can’t start with digitalization if you are not electrified.”
He adds: “For sure, certain countries are just opening up now – it takes time. Going in the direction of digitalization requires long-term planning. It starts with education.
“You have to have the right curriculum to get used to all the needs and capabilities for skilled labour that are needed for going forward in a digital way. That is something you see better developed in Europe, but in Asia they are catching up fast.”
He says that although “Siemens embarked early on digitalization, nevertheless there is a long way to go”.
“Because what you have to do is have tailor-made, custom solutions to create. On one hand you have all this software, but on the other hand you have the data collection. You have to make use of this data. There are customised apps to be created and this only comes with close collaborations with customers. What are their demands? What would they like to benefit from?”
Back in Amsterdam at European Utility Week, Markus Nitschke, head of communication and political affairs at E.ON, said that the company has recognized the need to change its business model to meet its customers’ need for electrical independence.
“The business model has changed for companies like E.ON. The commodity, electricity, will lose its importance and this requires a significant change in our company’s business model and general outlook.”
E.ON’s latest solutions, Solar and Storage, and SolarCloud, reflect the company’s strategy to support the customer’s growing independence.
The cloud solution, in particular, offers a new level of independency in energy supply as it enables the customer to store an unlimited amount of the energy they produce on a virtual electricity account.
Customers can withdraw from this ‘bank’ of energy whenever they need to. The solution is new on the market and is aimed mainly at the residential sector where there are rooftop solar and battery systems in place.
Nitschke says: “Our function has now changed at this point. In essence, we have become a bank where our customers can deposit and withdraw their own energy.”
He says that the company realized early on that transformation was necessary if it wanted to prosper in the new energy future.
However, the change has not been without its challenges. He points out that the biggest is actually embracing a new company attitude.
“It hasn’t been an easy process, especially considering that the traditional energy model has been in place for over 100 years. We had to make a firm decision that change is actually possible. The process is not stagnant either. We have to keep learning and innovating.”
Nitschke says “we see Germany as the leader of the energy transition globally. We see the opportunities that have become available as a result of the changes”.
“In Germany, there are currently 1.5 million residents who have roof top solar systems and this is just the beginning.
“We see the potential for much more and expect there to be well over 10 million rooftops with solar in the near future. We believe that the potential is there for every European country. Our work in the UK and Sweden reflect this belief.”