Innovation is driving changes in the electricity sector in a way unparalleled in its history. New technologies and the new business models are disrupting the utility sector irrevocably to the extent that its appearance in say 2050 is a matter of scenario conjecture.
“If I could answer that, I wouldn’t have to work anymore,” says Inken Braunschmidt, head of RWE’s Innovation Hub.
“The future energy system won’t be a system of just electrons and electricity but will be a system of infrastructure, of logistics, of communication, of mobility. The question we have to ask ourselves is what role we want to play in that system and for example whether we want to provide the electrons or to provide and steer the infrastructure, or to pull them all together,” says Dr Braunschmidt. “This is how we have to think about the future energy system.”
The innovation challenge
In an exclusive interview with Engerati in its European Utility Week 2015 interview series, Dr Braunschmidt said that RWE – which has a long history of innovation – is focused on becoming more customer centric. A greener society with more renewables, decentralized generation and prosumers along with growing digitization and the emergence of new entrants in the sector are the drivers.
“We are constantly looking for new offers and new business models for customers, based on their wants and needs,” she says. “We are a very technology driven company with a lot of technology so this is a given, and if we don’t have it we will look outside for partners. That isn’t the challenge. The shift is to get to what the customer wants and is prepared to pay for a product and that is how we approach innovation.”
One such product is the smart home platform, in which RWE was a ‘first mover’, with many thousands now in the marketplace.
“Our customers aren’t generally interested in energy or energy efficiency – in Germany we have among the most energy efficient homes in the world – and they are not likely to be interested in the complexity of managing a home generation system. They might be interested in support to do this, or in their comfort, or security, or entertainment or health and safety. This has indirectly to do with electricity in the end but we don’t sell it as such,” Dr Braunschmidt explains of her approach to innovation.
“The market is vast and what one can do depends on the technology available, but ultimately one has to meet the needs of customers. And if we don’t do it, someone else will – imagine if the telecoms industry had invented WhatsApp, which has led to a decline of the SMS.”
Another example of RWE innovation Dr Braunschmidt cites is the Ampacity project, in which in the Ruhr city of Essen a 10,000V superconductor cable has replaced the conventional 110,000V lines between two substations in the city centre – the longest use of this technology to date. The technology is still under development but is expected to lead to greater efficiencies and ultimately cost saving.
Looking ahead, energy storage is an area where she expects significant innovation. “Batteries are important for the whole energy transition, and a lot is happening at the moment and will continue happening in the next 10 to 20 years.”
Another is the topic of platforms. Dr Braunschmidt envisages that the types of platforms that “the Googles and Amazons” have for their products will come for the new products and services in the energy industry. Also IT-related is the increasing intelligence and learning of devices and machines, leading to the Internet of Things.
And another is mobility, encompassing both intelligence such as driverless vehicles, and their propulsion, be it battery or fuel-driven.
The RWE business
Asked about the business direction of RWE in the light of E.ON’s splitting to two companies focused on generation and retail, Dr Braunschmidt says that the company looked at a similar option but decided against it. “We are not identical as a company and we found that it wouldn’t make sense for us at the present.”
As a European utility RWE is involved in the smart meter rollouts, although these vary according to the country. For example in UK smart meters are rolled out, in the Netherlands they are being rolled out, while in Germany a decision has yet to be made on deployments, although the company has a 100,000 meter pilot in Mulheim.
“We want to test and learn and to do that via Mulheim in Germany but also via the rollouts in the UK and Netherlands.”
Issues utilities should be discussing
Looking ahead to European Utility Week, Dr Braunschmidt says that discussion topics should revolve around future technology and business trends and markets, rather than around the immediate challenges facing utilities and how they are trying to solve them.
“I’m sure that we all share the same challenges and problems and somehow we try in similar ways to face these challenges and go into the future. So, for me it would be interesting to discuss the future options and what kind of role we want to play. We can also learn from other industries as we are not the first facing change.”
At European Utility Week 2015, Dr Braunschmidt will be a participant in the panel discussion on 'IOT-connected home applications' on 5 November.