The term ‘Digital Transformation’ refers primarily to the disruptive effect of innovative technology on how we tackle our everyday problems, from paying our bills to communication.
According to McKinsey, already the impact that this transformation is having on the energy market is exceeding expectations, and it may well exceed them even more, both for us as the customers and the businesses we work for.
As of now, takes note McKinsey, the ‘Digital Transformation’ of the energy market is mostly felt in three areas: smart metering and smart grid; productivity tools for employees; and automation of back-office processes.
This, however, is just the beginning, as the process has only recently started to gain its momentum.
The emergence of smart homes brought about the emergence of smart metering and smart grid, an innovative trend that is believed to be the future of the energy market in general, and in CEE in particular.
Although the process of full implementation of both the smart metering and smart grid may take some time, especially in some countries, it is widely agreed upon that for the energy industry there is no other way to becoming more reliant and cost-efficient, and thus – environment-friendly as well. Already, in accord with the EU politics, most Western European countries are investing heavily in replacing their long outdated grids and metering devices with their more efficient digital equivalents.
The effect is a grid that not only provides the much needed data (which can serve as a basis for optimization on both the supplier and the customer end of the process), but can also be controlled with tools as simple as mobile phones and tablet devices.
The aim of smart metering and smart grid is not only to provide the utility companies and their customers with data – it is also to make that data easier to analyze and more actionable.
The full potential of big data analysis is widely recognized in other industries, e.g. on the financial market, where the predictive analysis serves as the universal basis for decision-making. The energy market is not far behind: already, the smart meters installed in our homes and smart grids that span our cities provide the suppliers with data that allows them to optimize the costs and efficiency on their end.
But the data captured with smart meters allows for the optimization on the customer end as well. And it is not only about making sure that we left the iron turned off when leaving for our holiday; it can also help us making much bigger decisions – such as whether a particular device is consuming too much and should be replaced with something more savvy.
Such a decision has never been easy – and now, it can be made with the help of easy-to-read, effectively aggregated, and reliable data.
The measurement of each consumer’s exact energy generation and consumption has never been easier, but combined with smart grid, smart metering can also provide the utilities with much more important data on the general state of the grid and possible optimization opportunities on a larger scale.
This allows the suppliers to better control how the energy is distributed – and that, in turn, can enable them to install the solutions that can make the difference precisely where it needs to be installed. As a result, each consumer is served the exact amount of energy he needs, and the losses that occur “on the way” are reduced to minimum.
The so-called “Smart Cities” are no longer science-fiction – thanks to the rapid development of IoT (Internet of Things) systems and precise sensor equipment the interconnected network of smart buildings and utilities is already becoming a reality.
Smart City initiatives are being launched around the globe, in cities both big and small, and encompass projects both large and small: from self-learning buildings to intelligent street lights that light up whenever someone is passing and turn off when there’s nobody around.
All of this would not be possible if it wasn’t for the smart metering and distributed generation. These solutions are all around us; they’re the future of energy.
Last but not least, the impact of the Digital Transformation in the energy market can be felt on the most basic level of interaction, which is customer-to-supplier communication.
Most of us carry a highly advanced computer in our pockets. For energy suppliers, it is now more important than ever to make it easier for their customers to contact them via this mobile communication platform in order to troubleshoot a problem or simply find needed answers.
The more streamlined the process, the better the customer experience and overall satisfaction. The most innovative utility companies are already there, providing their customers with user-friendly mobile apps that integrate the control panel for their smart meters and devices with easy-to-use helpdesk service.
For utility companies entering the digital age, the success depends on their ability to catch up, adapt, and pave the way for new solutions to old problems. Just in the past few years, the general availability of innovative technologies has made this already highly competitive market even more competitive than it has ever been before. This may well be the last call to enter the competition. Those late to the game may simply find themselves outscaled by their betters.