2017 Top Digital Trends for the Electricity Value Network

As the virtual and physical worlds converge, digitalization is driving the adoption of transformative business models for utilities, power producers, grid operators and their customers. There is a massive amount of change underway in every segment of the Electricity Value Network (EVN). Long-established practices are being challenged or upended. Data and analytics are becoming core to insights and actions. Incumbents now face not just their traditional competitors, but a wave of fast-moving digital entrants pouring into the industry at an alarming speed.

It’s not just the amount of change that is testing the industry, but the head-spinning rate at which this change is accelerating that may be the biggest challenge incumbent companies face. The number and scope of digital use cases across the EVN is growing exponentially. Many of today’s use cases may not have been conceivable just a few years ago. Innovation has displaced stability.

Power leaders determined to adapt and thrive in this rapidly shifting landscape must understand the top digital trends shaping the industry today, assess how they will impact their business model and have a plan to address them.

Top 10 Digital Trends for the Electricity Value Network

1.     Renewables and DERs – Industry-wide Impact: Renewable energy is undergoing a paradigm shift as more utility-scale wind and solar reach grid parity by driving lower cost curves and providing alternative energy options to traditional energy generation sources. The ability of analytics to accurately predict and maximize these sources, while balancing integration of traditional power generation, will define those who will successfully navigate this change.

2.     Artificial intelligence (AI) Becomes Scalable and Mainstream: There will be an unprecedented number of new and innovative applications of AI for the energy industry this year, from remote monitoring of transmission assets by drones to new deep-learning capabilities for asset monitoring and performance.

3.     Disruptive Cyberattacks Will Drive Action: Security incidents have the potential to catalyze board and regulatory oversight: the power industry remains vulnerable to cyberattacks which could cost the US economy up to $1 trillion if not protected. This threat is changing the industry’s response, starting with the board room.

4.     Multi-Directional - the New grid: The rise of intelligent grid technology, two-way power flows and greater quality power delivery is transforming the grid and fueling innovation that will challenge incumbent business models.

5.     Prosumer Wave is Here: End users have an increasing array of choices that will lead them to seek out power providers that offer them control over their energy usage via well-designed mobile and other customer experiences. Non-utility companies and digital disruptors like Nest are poised to grab 20% of the retail energy market.

6.     CXO Roles Transform: Digitalization and analytics are rapidly changing the role of executive management (CIOs, CTOs, etc.) at power and utility companies as these firms increasingly adopt digital technologies to improve operations and financial results. This is leading to expanded roles for CIOs and to the creation of more Chief Digital Officer and Chief Transformation Officer roles.

7.     Cloud + Edge is the Next Imperative: Digitalization, renewables and DERs, a smarter grid and rise of platform-based models mean that operators will need to better leverage data and analytics to improved operational and business performance. The competitive advantage of cloud and edge computing will eclipse the limitations of legacy systems.

8.     The Talent Challenge: Utilities and the entire energy sector face a massive brain drain in the coming years as huge numbers of older workers retire and take with them their skills and experience. This challenge will require the industry to rebuild and reconfigure their workforce using multiple strategies that codify and augment worker knowledge using analytics, decision support and automation.

9.     The Platform Economy for the Power Industry: The adoption of the “Platform Economy” will create both massive disruption and new opportunities for power leaders. It’s not simply about a technology platform, but about the rise of platform-based business models that will reshape the industry and challenge incumbent leaders.

10. Winners - Prepared for Digital: More power producers, utilities and grid operators are adopting strategic digital initiatives to change their business models to compete in a radically changing power market. This will further accelerate industry change and hasten the industry-wide move to digital.

Learn more about these 10 trends in this Executive Brief from GE as you set your priorities and guide your strategic and operational decisions this year.   

We are gathering the top global power and utility executives at our annual Minds + Machines Europe event in Berlin in June this year to discuss these trends and how these leaders are navigating market shifts with digital. My expectation is that there will be considerable discussion around new energy sources, transformative grid configurations and the new role of the consumer – all within the context of sensors, analytics, software and the possibilities they represent.

It’s hard to predict which of these 10 trends will drive the greatest industry transformation. However, one thing is clear: change in the energy markets is inevitable, but standing still is not an option. Only those prepared to understand and leverage data driven decisions will be positioned to win.