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6 areas of innovation

In order to become a frontrunner of the industry, a utility needs to master six areas of technological innovation

Innovation is immensely important for any business endeavour and is at the heart of the global energy sector transformation we are currently witnessing

Regardless of the sector in question, innovation is immensely important for any market participant. Present climate in the energy sector facilitates the emergence of new disruptors. In this context, it is noteworthy to point out that two types of innovations can be seen in the sector. It’s not that traditional energy companies do not innovate. The majority of companies are more than familiar with applying innovative approaches and technologies. However, they mostly focus on identifying opportunities in optimising existing processes. This is what so called linear innovation through gradual improvements is about. When we talk about disruptors we refer to companies that don’t just improve existing processes, but break the mould of current market. Naturally, innovations that improve existing technological solutions are at the heart of the current energy transition.

Technological innovations paired with globalisation and evolved customer behaviour create a window of opportunity for a second type of innovation – one that focuses on creating new business models. Apart from the technological fields of innovation mentioned, changes in the energy sector will be driven by electric vehicles and their accommodating infrastructure.

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Areas of technological innovation


Artificial intelligence

AI aided predictive analytics are enabling utilities to improve their energy management services by using big data and machine learning algorithms to optimize supply-demand curves and predict the possibility of outages

In order to become a frontrunner of the industry, a utility needs to master six areas of technological innovation

It seems that the vast majority of utility companies view artificial intelligence primarily through the scope of customer service. It is therefore mostly applied to digital marketing and various customer orientated applications.
Utilities apply AI because a number of its applications are considered as mature technology. In other words, AI’s perceived investment risk is low and it can potentially deliver a considerable return on investment during a relatively short time horizon. If a utility decides to start applying AI based processes, it usually focuses on enabling superior data processing and analytics and improving customer experience.
Multiple existing processes within the utility can be enhanced by using AI. Utilities have so far applied AI to automate specific tasks related to the repetitive nature of customer inquiries.
Improvements in areas such as invoicing, paying, but also reporting planned or unscheduled outages have enabled a much more efficient communication between utilities and consumers bridging a large gap present since the early days of the industry.
Opening up a channel of communication is one of the first steps towards providing a service, not just a commodity.

The role of battery storage is even more emphasised with the increased use of renewable energy sources.
The majority of renewable energy in the electricity sector comes from either wind or solar power. These two energy sources are characterised by variable production. In other words, their production is dependent on outside conditions.
Consumption, on the other hand, has a different modus operandi resulting in a potential system imbalance. Energy storage thus becomes a key player providing the necessary balancing service between real-time production and consumption of electricity.
Balancing issues regarding RES might be divided into two separate issues.

1.Unforeseeable variations of production

2.Imbalance between the time renewable energy is produced and energy is consumed

Apart from balancing out the shortcomings of the renewable generation portfolio, their role is also aimed at smoothing out the demand curve and thus influencing the system from the very bottom of the supply chain.


Battery storage

As battery costs record a multifolddecline they are increasingly being considered the next big thing in the electricity sector

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Big data

Gartner defined big data as “data that contains greater variety arriving in increasing volumes and with ever-higher velocity”

Digitalising the energy supply chain would enable generating enormous amounts of data able to describe the details of system operation. Big data represents an array of complex data sets. Given their large size, these data sets are unmanageable by traditional data processing software.
Data has to be processed and analysed in order to draw insights on how to optimise the system. It can also be used to increase transparency, coordination and information sharing.
There are several business areas in which big data can be of particular aid to the energy industry:

- Consumption forecasting – predicting customer demand during the hours of a day;
- Predictive Maintenance – optimising the maintenance process;
- Operation – proactively analysing processes leads to insights on how to improve efficiency;
- Customer experience – collecting data can be a gateway to offering a better service;
- Security – identifying patterns that indicate potential fraudulent behaviour;
- Product development – leveraging predictive models to anticipate customer needs;
- Machine learning – increasing the accuracy of expected outcomes.

Blockchain is a powerful peer-to-peer network technology. It utilises advanced computer science techniques in enabling trustworthy interactions. Blockchain technology is being increasingly adopted in platforms dealing with peer-to-peer transactions.
At present, blockchain technology is mostly applied in the financial sector. However, the network infrastructure of the energy system makes it suitable for blockchain applications. Together with IoT, blockchain will soon transform operations in the energy sector connecting a vast array of devices with platforms that record and share data in real time.
In the future, we are likely to witness a transformation of existing transaction models from a centralised to a decentralised structure. Decentralised data storage and automated validation would make transactions more transparent and easier to monitor and record.
By incorporating blockchain technology in transaction models of the energy sector, the need for intermediaries would be eradicated opening up space for more efficient asset management systems and improved emission unit allowance trading.
Blockchain technology can also be incorporated into other aspects of business of a utility such as metering, billing and clearing. These processes will also involve the use of artificial intelligence.



Blockchain functions as a shared electronic ledger easily accessible by multiple parties offering an anonymous yet reliable, secure and unchangeable record of transactions

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Smart grid & IoT

Internet of Things (Iot) will be the enabling technology in the world of decentralised energy production and prosumers

The centralised approach used in solving the energy puzzle envisioned a one way flow of energy from producers to consumers with the power grid acting as a backbone of the system. Microgrids offer a different perspective. They envision a decentralised approach where instead of large production stations we have smaller distributed sources of energy.
The system is now being designed to enable a bidirectional flow of energyand enable everyone to contribute in the power generation process.
Smart meters are being extensively implemented across Europe and are now considered standard equipment. Smart home devices are entering an increasing number of houses enabling consumers to monitor, for the first time, the energy consumption of their appliances.
Soon enough, machine learning algorithms will be incorporated in the majority of these devices enabling computer aided optimisation of household processes.
In this context, the Internet of Things (IoT) will play a crucial role facilitating a more efficient use of energy. It can allow device optimisation and the correction of demand, but it can also enable buying and selling energy.

Powered by favourable government policies, renewables are quickly becoming an incremental part of the energy landscape. Instead of coal, oil or gas, energy sources such as solar, wind, biomass and biogas have gained momentum.
Innovation will play a crucial part in making technologies such as solar and wind generation, battery storage and electric vehicles more accessible and affordable, but also more flexible and more reliable.
At present, looking at a global scale, hydropower plants are the foundation of renewable energy. Up until relatively recently, hydropower was by far the most dominant renewable energy generation technology being installed. During past years, this is no longer the case.
Wind and solar power emerged as solutions for the new energy future. With multifolddecreases in costs these two technologies have become the bridge towards a sustainable energy system.
Reduced investment costs mean that renewables are now on par with traditional energy sources. Renewable sources with low variable costs and independent from commodity prices’ volatility are the only sustainable way forward.

Image by Andreas Gücklhorn


Following years of falling costs renewables are now reaching a stage where they are competitive to traditional sources and are quickly becoming an incremental part of the energy landscape

Utility of the future

Utility of the future

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