utility disruption
Image credit: Fabien Bazanegue - Unsplash

It’s a buzzword that’s slowly starting to lose its flavour for many – disruption – yet this intersection between innovation, originality and necessity promises a revolution of the status-quo.

As use of the term spread from places like Silicon Valley to innovations developed in garages in one-horse towns, the intensity and hype get turned to 11, but the hype is wrapped up in an inexact forecast – a promise that life will never be the same again … someday.

A lot of us in the technology space consumed technology-based TV shows, devoured popular technological magazines in our youth, and marvelled at the new technology set to deliver personal flying cars (by the 1960s) and free electricity (early-twentieth-century) or houses that are smart enough to turn on the coffee machine, fire up the laundry and even advise you on how to dress for the day (well, they got that one right, just late, as usual).

But why are we doing it?

In a recent interview at the 2019 European Utility Week in Paris, Susanne Seitz of Landis+Gyr shared her views on what’s driving disruption, and it isn’t just our dreams for a technological future – rather, it’s our concern for a sustainable future in the face of the dire threat of climate change that’s pushing everything from investment strategies to home technology.

This article was originally published in Smart Energy International issue 1 – 2020. Read the full digimag here or subscribe to receive a print copy here.

From the inside out: Disruption in the industry from policy to practice

Globally, we’ve seen what is, arguably, the biggest global disruption since the industrial revolution, an urgent and concerted global effort by both highly-developed and emerging economies to decarbonise the generation and distribution of electricity, in an effort to ensure that there is a technological future beyond 2050.

This massive internally-caused threat isn’t the result of customer pressure, or the rate of technological development, but rather, cold fact, and those facts are driving policy into industry – from manufacturing to power generation.

Although there are little by way of visible incentives from government, renewable energy and the phasing out of fossil-fuel use are driving the need for technology’s intervention. The practice of decarbonisation, of saving the planet, requires continued disruption.

From the outside in: Human dynamics pushing the pace

If you’re getting tired of the noise and confusion disruption brings, I’m afraid you are part of the problem. It’s in our nature to push for advancement.

Even if we were just to adopt the changes we need to make to ensure we have a future, there are more major shifts coming in how we live. There will be the advancements that help propel us forward to our future aspirations – not just an EV, for instance, but a better looking, better-performing one, because that is what human beings do.

Then, we have the need to contribute to the continued success of the human race – whether through innovations in solar for rural electrification in arid, remote regions of the globe, or the desalination of sea-water in order to meet the predicted future demand for fresh water – such as a project by DEWA which will see Dubai capable of a self-sustaining supply.

Then we have the added pressure of customer demand, created in the wake of the piloting

or prototyping of new technologies in the public view, and this is where human nature comes into play.

The good news is, it will slow down

At least, that’s according to the person accredited with calculating the rate of technological development in integrated circuitry. According to Gordon Moore, a past chairman of Intel, and author of Moore’s Law, the number of transistors on an integrated chip doubles every one-and-a-half to two years.

Moore and other researchers believe that this rate can’t be sustained beyond 2025. In April 2005, Moore said in an interview: “It can’t continue forever. The nature of exponentials is that you push them out and eventually disaster happens.”

He also noted that the size of transistors would eventually reach atomic levels: “In terms of size [of transistors] you can see that we’re approaching the size of atoms which is a fundamental barrier, but it’ll be two or three generations before we get that far – and that’s as far out as we’ve ever been able to see. We have another 10 to 20 years before we reach a fundamental limit. By then they’ll be able to make bigger chips and have transistor budgets in the billions.”

People power

The vast majority of Americans believe the country’s government must take further action to reduce the effects of climate change, and protect air quality, clean water and biodiversity, with votes in early primary states also urging the phasing out of oil production, according to two polls conducted by the Pew Research Center.

According to the same Pew poll, 80% of Americans acknowledge the effects of human activities on climate change, with 50% indicating their belief that human behaviour contributes significantly to worsening climate conditions.

So, why the feeling of vulnerability?

The simple reason: We’re living in a juxtaposition – the technological changes necessary to drive the energy transition are being made, and the pace is ever-increasing in efforts to meet calls from municipalities, governments, corporates, energy companies and consumers to set sterner net-zero targets.

According to a recent report by mega consulting company Accenture, entitled “Embrace the power of the wise pivot”, new entrants into the energy market are finding the right niches not just to protect their market position, but to truly change it.

They’re investing in renewables, but also, via acquisition or research funding, extending their offerings across the value chain. Most importantly, they’re not waiting for the pressure to become so great that desperation replaces innovation and are getting out ahead of customer expectations.

But that change needs support. Legislation needs to drive regulations, policies, subsidies and government-supported infrastructure development. Private-public partnerships have proven to be highly effective in developed economies and continue to be a successful model for rapid growth, but need to be accelerated once pilot programmes have been shown success. Ultimately, more of the risk needs to be transferred from the utility to government in the public interest.

The reality is that utilities are arguably the most vulnerable sector in the energy value chain; and through the rise of corporate power-purchase agreements, the massive development of AI or machine-learning-based stable renewable technology infrastructure, EV infrastructure and grid-edge technologies such as building automation will help tie the new version of the power grid together.

These technologies will serve the future growth of the utility, more concrete examples will inspire greater confidence, and then, being brave enough to step out ahead of the pack will bring the richest rewards.

Italian energy giant Enel’s focus on sustainability in its strategy is, the company says, to benefit from the opportunities offered by the expanding value pool associated with the acceleration of this transition. By becoming the largest supplier of clean energy in Europe, and by targeting decarbonisation of its global generation fleet, the company is set to ride proud on the wave of renewable energy provision, providing the most sophisticated offerings for customers that will demand more sustainable options.

It’s going to take a shift from us

Most of us realise that we don’t sound the same as the graduates coming out of university with heads full of theory and terms for trends that sound half-fancied and half-fact, but one term so commonly used in the cafeteria and the boardroom it seems unlikely to change comes to mind: Mindset. If it makes sense that in order to change a mindset, one must accept a different notion to one’s own, then now is the time to accept that we have a role to play in a different world than the one we graduated in.

As technology evangelist Thorsten Heller put it: “Changing the mindsets and thought processes of the people working in utilities is a key part of building Digital DNA. Only when this happens can new operating models be introduced, and innovative technologies be used to their full potential. Changing mindsets is the hardest part of building Digital DNA.”

A product of the progress of our own products

In closing, perhaps it’s worthwhile to note that humankind is in one of its most altruistically inclined phases. The Millennial and Generation Z protagonists that will take over the reins on the road to a sustainable future are motivated by a great cause – one that requires the best of the human spirit to achieve. It will require innovation, intrepid inventiveness of thought and a generation familiar with the pace of technological development in ways that Generation X, or the Baby Boomers have felt, but not lived as much.

For those of us driving the change, we need the benefit of trust in the face of risk, because the future of utilities, of energy and continued disruption will be driven by the one thing that truly unites us: Necessity.