The energy transition is urgent, is evident, is supposed to be a standard already. However, it might not be exactly like that.
The energy sector was a pioneer in digitalization, starting to use the emerging technologies of 1970 to support grid management and operation. At this rhythm is expected that digital technologies will bring connection, reliability, efficiency, intelligence, and sustainability during the subsequent decades to energy systems.
The race of digitalization in energy has started, but it is fast enough?
Of the multiple key trends driving energy transition, energy digitalization has risen above the others due to the potential to decrease costs in the sector.
Digitalization trends are pretty impressive, with the investment in digital technologies by energy companies reaching one trillion euros spent last year, and technologies such as Big Data and AI are a common factor in energy companies’ strategies. This global focus combined with the emerging quantity of available data – around 90% of the data was created during these last two years – gives us the perfect blend to accelerate digitalization, which would mean a faster transition. At least, that would be the logical conclusion, but the reality isn’t exactly like this. 70% of the digitalization initiatives do not reach their goals, which means that from the total invested last year, 745 million euros went to waste, according to Protiviti Inc.
Harvard Business Review studied that the most common reason is the lack of mindset to change, so most projects are wrapped up under the innovation factor to facilitate change for all stakeholders involved. After all, it is not peaceful to transform a secular industry from one day to the other.
The industry has focused its full attention on hardware rather than software because it is something you can touch and understand better. And, it is also easier to perceive the investment. Smart grid infrastructure, smart meters, electric vehicle charging stations are the top-3 technologies with more investment. On the other hand, energy management systems or grid management software only represent a small part of the investments. This is the first indicator that energy digitalization has kickstarted with building the physical infrastructure to gather data, leading to a rich data stream to feed to software, as it should be.
According to Protiviti Inc, most companies consider having gathered enough data to go to the next step – extracting value from data.
So, what are they waiting for?
It is clear the importance of extracting value for executives. However, its operationalization is still going slow, resulting in lost opportunities for new income streams. Internal innovation teams lead the process, and the focus is to reach a digital business model supported by data as the ultimate challenge. This brings us to the question – what is digitalization after all? We might not be at the point where there is a standard definition for it; for some, it might be hardware; for others, it will be software; or even the knowledge created by both of them.
There are multiples ways to speed up the process – accelerator programs, associations and companies with the technical expertise to boost this process, just like Smartwatt. These different paths show that some utilities understand that digitalization goes beyond the infrastructure, opening numerous possibilities with the growing data availability to develop this knowledge and reach new and more effective business models, rather than wait for the digitalization to eradicate their current one.
Smartwatt’s core competencies are energy systems optimization, from project to installation and to the asset management in real-time, covering the value chain from top to bottom. The company has a culture of future. The Smartwatt team develops solutions that increase the efficiency of their customers’ business processes. The company mission is empowering their partner’s energy systems with the most advanced tools and processes for optimizing energy consumption, renewable energy production and maintenance operations, making energy simple, safe, affordable and sustainable. For additional info, please contact us.