The challenge of the energy transition

Energy transition

Written by Frederik Baert

29 January 2021

The “energy transition” – everybody is talking about it, but it has so many dimensions that it is difficult to comprehend for the different market players (energy suppliers, grid operators, customers, energy co-operations, …) to see how to move forward. Add to that, that most of the players are in the middle of a digital transformation, trying to keep up.

Networked Energy Model

While the energy market was initially very linear and hence relatively straightforward, the move to more and more renewable energy as a response to climate change has complicated the value chains significantly. Some of the challenges we see for the different energy players are:

  • Move to New Business Models: Decarbonization, decentralization, digitalization, and democratization forces are opening new business opportunities in the utility sector with new financial revenue models. Those forces also require new customer engagement approaches that transform underlying application areas. We see that incumbent energy suppliers are having issues incorporating these.
  • Legacy vs New Tech: The commercial off-the-shelf customer information system market that focused on achieving internal efficiency in meter to cash and customer service areas has stalled. Current vendors are not addressing new requirements within their legacy offerings, which mainly focus on commoditized system-of-record needs.
  • Connected Customer: Customers expect more engagement with their suppliers. That leads to a requirement for a digital technology platform architecture that must support both the traditional needs (getting a correct invoice out), but also needs to be able to add discrete new capabilities in the customer engagement and experience area.

All of these challenges need to cope with data silos spread throughout a mixture of legacy and modern information systems, which results in a couple of disadvantages:

  • No value of data: Unable to get more value of the data to support new business models, improve margins, increase customer satisfaction
  • Integration hell: Consistent exposure to integration hell to exchange data between all the different information systems, leading to high development and maintenance costs
  • Losing customer focus: more internally oriented instead of customer-connected focus, due to these different technical challenges
  • Blackbox Legacy: Legacy systems act as black-box systems: if all goes well, it works perfectly, but if something is wrong, the cost to solve issues exponentially increases
  • Slow innovation: Legacy systems are not supporting new business models, product innovations, they are often at a high cost negatively impacting the cost to serve

Energy transition opportunities

However, for fast-moving energy suppliers, there is also a window of opportunity due to the energy transition, if you can integrate the different data sets in one scalable platform and provide the ability for every active participant to:

  1. Optimize energy usage
  2. Increase, and encourage energy efficiency
  3. Lowering energy costs
  4. Reduce the cost to serve
  5. Deliver innovative products for the customer
  6. Build new business models

A recent example of new business models, and how new players enter the market is Coolblue who enters the market as a new energy supplier, after earlier experiences selling and installing solar panels and wall boxes for electric cars. The focus of Coolblue? Reducing energy, and a combination of selling energy-saving solutions like smart thermostats, replacing old energy-consuming appliances with more smart devices. More information here and here.

A digital platform for Energy & Utilities

Modern Energy Suppliers require a modern business technology platform. According to Gartner a digital business technology platform has a set of dimensions:

  • Customer Oriented
  • IoT Oriented (Things)
  • IT Systems (Customer Administration, Contracting, Billing & Payments)
  • Ecosystems (integration with partners)
  • Combined with Continuous Intelligence
Digital Business Technology Platform

zelospark has built byNeuron ENERGY, a modern #energytech platform that embraces these principles allowing modern Energy Suppliers to focus on their customers with new innovative offerings, and not being confronted with integration hell, coping with data silos, or finding their ways in legacy systems. More information on byNeuron ENERGY can be found here.

In the coming weeks, I will start a blog series on how byNeuron ENERGY implements the different parts of a Digital Platform Architecture.

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