Smart (and thriving): the tech-enabled transformation trends driving the utility business of the future
With 2023 the world’s hottest year on record (and 2024 set to eclipse that mark), our sense of collective alarm, and the need for collective action, about the global warming crisis remains more than justified.
But recent research also offers some small shoots of cautious optimism, suggesting that global emissions may peak this year – and then start to fall – if global growth in the development, and uptake, of clean technologies continues.1
As far as Australia is concerned, our electricity grid continues its rapid and sustainable shift to one built on renewable sources, and our numbers are telling a very impressive story about a system undergoing truly significant change.
On the supply side, grid scale wind and solar, generating around 20GW today, will grow to more than 125GW by 2050, while 2023 saw the addition of 3.1 GW of rooftop solar capacity.
With more than 56,000 household battery systems installed last year, storage capacity is forecast to grow from 3GW in 2023 to 19GW by the end of the decade, and 57GW by 2050.
And demand-wise, electricity consumption from the grid is forecast to grow from 202TWh in 2030, to more than 300TWh in 2050.2
Against this revolutionary backdrop, a new (and highly disrupted, complex and competitive) energy world is very much here. And a series of important business drivers, technology trends, and shifts across both generation and demand are dictating a future quite different to that of today – for both industry operators and their customers.
Certainly, digital technology is fundamentally (and rapidly) transforming the sector and impacting business models. A need, not a choice, for operators, it is the key to developing new strategies and new ways of operating to deliver better customer service and value, and sustainable, safe and efficient energy companies.
Of course, there is still so much to do if we are to limit the increase in global temperature. We still need to reduce global emissions by roughly 50% by 2030 – now little more than five years away.
To continue the momentum of our collective climate goals, we think there are five main drivers for a utility company.
Empowered customers
Empowered customers – those with access to more and more information about their plans and their power usage, and who may not hesitate to change their utility provider – are increasingly crucial to network operations, and are driving changes in their expectations of service offerings, standards, and pricing.
To meet the demands of this more sophisticated consumer, personalised services and offers of connected partner solutions will be vital, along with tailored propositions that cater to a range of customer segments.
Evolution of renewable energy grid infrastructure
The pursuit of a net zero Australian economy is boosting demand for green technologies, with digital utilities playing a crucial role in energy system and grid design.
Predictive asset management and analytics, monitoring and managing operation of two-way flows of electricity, catering for an evolving mix of generation resources (including active consumer participation) and managing complex asset augmentation projects won’t be options, they will be requirements.
Climate change and extreme weather events
Extreme weather with longer fire seasons, extreme heat and heavy rainfall events are becoming more frequent and more intense.
In the face of these environmental challenges, the grid has to become more resilient. Data-driven modelling and simulations for weather events are critical to delivering that resilience.
Efficient, cyber-resilient and sustainable service expectations
Cyber risk, and associated threats to both network resilience and customer data security, is an increasing challenge.
Digital utilities must be proactive and agile and invest in corporate strategy, talent, finance, and technology infrastructure management to better deliver the service resilience and safety, their customers expect, and the economy needs.
Migration of people and communities
Climate change can undermine food, water and economic security, and leads people to consider temporary, seasonal, circular or even permanent migration.
Across Australia, nearly 4% of properties (~520,000) will be uninsurable by 2030.3 People and communities in impacted areas are likely to need solutions and support beyond insurance, including relocation. Governments must invest in infrastructure and services that account for this risk, as well as urban growth, while utility operators will need to manage complex asset augmentation projects.
And the technology trends
Transforming to a clean energy future relies on technology (today’s and tomorrow’s) to meet the demands of a broad range of commercial and retail customers, and best equip the diverse ecosystem of employees, contractors, field staff and suppliers that deliver electricity services.
The increasing uptake in the adoption of cloud, data, integrated platforms and artificial intelligence solutions will continue to drive faster, and more informed, operational insights.
Digitalisation of infrastructure and devices through augmented and virtual reality, edge computing and quantum computing is enabling real-time data collection and updated network services to handle increased data and connectivity.
And technology will sit behind corporate strategic and operational challenges, from smart energy planning and capital project execution to grid modernisation and resilience and managing and mitigating cyber risk.
Understanding...and acting
Australia’s power, renewables and utilities sector is clearly transforming to achieve a sustainable future for energy production, reducing environmental impact, and aiming for a low carbon, net-zero emissions future.
Understanding, and responding to, the business drivers and technology trends is critical to optimising strategy, finance, technology management and a more digital, flexible, and skilled workforce, to drive efficiency, innovation, agility and sustainability.
Businesses that make the right moves to address the challenges they might face and, just as importantly, embrace the associated opportunities, will set themselves up as our prosperous and technologically smart utilities of the future.
1. When will global greenhouse gas emissions peak? Climate Analytics
2. Clean Energy Australia 2024, Clean Energy Council
3. Uninsurable Nation: Australia’s Most Climate-Vulnerable Places, Climate Council
