Energy Sector At Risk Of Being Ubered

Utilities need to innovate to secure their future in the energy transformation.
Published: Mon 30 Nov 2015

Innovation is set to be the new buzzword in the energy sector as, facing disruptions from all sides with the fast moving transformation to a decentralized, digitally connected consumer-based landscape, utilities look to stay ahead.

Companies such as Google and Tesla are fast gaining footholds in the energy sector with innovative products and services. So far we are aware of only a few utilities that have a stated commitment to innovation and are setting themselves up to be able to secure their customer base in the face of this competition.

This was supported at European Utility Week 2015, with a poll with almost half of respondents (46%) considering that the lack of an innovation culture was the biggest threat currently facing utilities – double the number naming the second biggest threat, regulatory/policy uncertainty.

A strong presence of young companies with novel products, along with awards and discussions, lent support to this innovation imperative. How it is embraced could be a make or break.  

Innovation - no boundaries

Who thinks Google will offer electricity in the next 3 years, asked Inken Braunschmidt, opening her keynote presentation? Who thinks electricity will be free within 5-10 years? Who thinks there will be an Uber (for the taxi industry) or Airbnb (accommodation industry) for energy within the next 5-10 years?

Approximately half of the audience agreed with the first and last questions but only perhaps around 10% with the second.

“We think all three will happen and we want to be the ‘Uber’ and not be ‘Ubered’,” said Ms Braunschmidt, Head of Innovation at RWE.

Innovation in this context can include technology but it also encompasses new ways of running the business and of engaging customers, alongside the traditional utility functions.

Among RWE’s innovation targets is that 25% of revenues will be generated from products new to the company by 2020.

Utility bundling innovation

But will innovation in the utility itself be sufficient? In the view of Susana Quintana-Plaza, Senior Vice President Technology & Innovation at E.ON, innovation shouldn’t and won’t come from within the utility alone and rather the utility will be the party to “bundle” the innovation and make it available to their customers. “As anyone with a rooftop can become a solar producer, our industry has effectively become a consumer goods industry,” she says. “Success won’t depend on innovation alone but whether we can make the transfer to become a consumer goods industry, reaching out to the consumer with new products and services.”

“And it’s about being agile and customer-centric. We don’t need to develop the technology in-house but pick it from startup A and company B and bundle it.”

Award winning innovations

Innovation was recognized with several awards at European Utility Week, among them the Industry Innovation Award to UK Power Networks for its Flexible Urban Networks LV (FUN-LV) project and the Young Innovator Award to Tobias Linnenberg of the German company OEEX for developing a platform for energy trading. [Engerati-UK Power Networks Wins the Industry Innovation Award and The New Energy Consumer Demands Innovation]

In the Product Innovation Awards, UK company EMSc came out as the overall winner (also winning the Grid & Renewable Integration category) for its Powerstar Virtue product. “Powerstar Virtue essentially allows a supermarket or other large energy user to go off-grid to use stored energy,” explained Martin Stevens, EMS International Sales Director.

The heart of the product is the Powerstar transformer, which harnesses the induced negative power (back EMF) through voltage optimization. Powerstar Virtue, which was developed with E.ON and the University of Warwick with support of a €1.65 million Horizon 2020 Innovation and Research Programme grant, adds storage enabling this energy, or renewable energy integrated to the system, to be stored for later re-use. A 500kWh system is just starting a 12-month trial at a Walmart supermarket in southwest England taking the supermarket off-grid during the 5-7 pm evening peak.

Other product award winners were REstore in the Energy Storage category, Cyan Technology Ltd in the Smart Metering, ICT & Data Management, MEAZON in the Smart Home & and End User Engagement category, and Wirepas in the IoT Product Innovation category.