Navigant Research Blog

Utilities Will Rely on Vendor Ecosystems to Support the Energy Transition

— November 10, 2017

Until recently, I often introduced presentations or blog posts with a warning that the utility industry was about to enter the most disruptive decade in its century-long existence. That is no longer true, because I believe the industry has now entered that decade. Okay, the timing for different countries may vary, as will the length of the period of disruption. In fact, some countries—Germany and Denmark in particular—have experienced significant disruption already. But for most markets, the rumblings, threats, omens, and rumors have only recently turned into action.

Navigant Research has a significant volume of commentary on future energy markets, all based around its concept of the Energy Cloud—where energy becomes more distributed, clean, intelligent, and mobile. The old business model of centralized generation will shift to a decentralized, customer-centric value chain, where energy services become far more important than energy supply. Navigant Research also identified an additional $1 trillion of new value created in the Energy Cloud by 2030.

There Will Be No Energy Transition without a Digital Transformation

It is important to note that the energy transition is as much a digital revolution as it is an energy revolution. The $1 trillion of new value identified by Navigant Research will likely be created through the provision of digital energy services, from automated demand response to transactive energy. None of this value will be delivered without access to vast quantities of data from an enormous and heterogeneous array of devices. None of this value can be delivered without a robust IT infrastructure to support digital energy services.

As part of thought leadership, Navigant Research has identified seven platforms that are critical to the delivery of digital services within the Energy Cloud. Additional white papers are on the roadmap to discuss these platforms in further detail. Next up is a white paper on the neural grid platform, which describes—among other things—the devices, communications, and analytics that will underpin all other digital services in the Energy Cloud.

Vendor Ecosystems Will Help Manage the Complexity of the Energy Cloud

Navigant Research’s upcoming Neural Grid white paper will shine a light on the sheer complexity of the IT infrastructure required. There will not be any plug and play platform for the foreseeable future. The market is new, moving rapidly, and different utilities have different requirements. As a result, over the next decades individual utilities will deploy many platforms that rely on many datasets created by many devices communicated over many networks using many protocols stored in many locations supplied by many, many different vendors.

It is critical for the success of the Energy Cloud that vendors cooperate within official and unofficial partnerships and work toward their customers’ common goals. Join us on November 14 at 2:00 p.m. EST for an Intel-sponsored Navigant Research webinar. We’ll explore in more detail how the energy transition and associated digital transformation requires strong vendor ecosystems and gain some insights from Intel, which sits at the heart of one of the largest smart grid ecosystems.

 

IoT Gains Ground among Corporate Executives

— September 28, 2017

Recent studies point to growing acceptance of Internet of Things (IoT) technologies among businesses. These studies provide more evidence that the concept has moved beyond hype and into a gray area of early stage acceptance, experimentation, and uncertainty.

Verizon’s latest report on the topic finds 73% of executive survey respondents are either deploying IoT solutions or researching the technology. The report also highlights compelling economics, citing that among business-to-business applications, there is the possibility to generate nearly 70% of the potential value enabled by IoT technologies.

Another study from enterprise software vendor IFS found that 30% of respondents from industrial companies say they use IoT data to support field service management, while 16% say their firms use IoT data in enterprise resource planning software. While this response did not come from the majority of respondents, the data shows a significant level of early adoption. The study also suggests the effects of IoT are likely to be greater in the industrial sector than among consumer products and services. And I concur; the drive to cut costs, improve operational efficiencies, and seek tangible ROI is more compelling among businesses. Consumers care about such things to be sure, but they seldom act with the same verve as corporations.

SAP had a similar study earlier this year that found 3% of corporate executive respondents saying their companies had completed companywide digital transformation projects, many of which involved IoT technologies. This is still a low level of adoption in view of previous industry expectations. Nonetheless, 55% of the same respondents say their firms are conducting pilot programs, which is a positive sign.

Case Studies Proving Necessary

What is lacking in the marketplace for IoT, or industrial IoT (IIoT), is a persuasive set of case studies that show how a company can move from where it is pre-IoT to a valuable deployment involving the latest tools. Business leaders tend to be skeptical about new technology and want to make sure the benefits are clear before moving ahead, especially with the complexities and new costs involved in IIoT projects. There are examples of companies making strides in this direction. One is Alpiq, a leading Swiss utility, which has adopted an IoT data strategy to transform its operations and now expects to see lower total costs. But more examples across many industrial sectors are needed before one can say the trend has truly taken hold. Until then, we shall be in an uncertain period as many firms test the waters and gradually learn what works best. Once more of the leaders set the stage, others will follow.

 

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