As content director for the European Utility Week (EUW) programme, one of the most significant discussions for the smart city industry I have witnessed, was the EUW panel interaction that took place during the Sustainable and Smart City track about business models for the energy sector.
The panel of engaged top sector experts was challenged to answer 3 key questions in an effort to create a roadmap for the Energy Sector, in the context of a Sustainable and Smart City. Here are the key takeaways from that panel.
What are the most important trends influencing the evolution of smart cities from an energy perspective?
- The future of the car is electric, bringing with it a range of new services.
- The convergence of industries (car manufacturers, energy companies, tech companies, startups) which have to work together, fostering a proliferation of non-traditional players pushing the Utilities to throw conservatism out of the window.
- Megacities helping solving decarbonisation, bringing with them great needs for resilient and secure services from the Energy sector and with it a potential key role for the Utility in helping design those megacities.
- The growing role of the Citizens/Consumers in the transition, with joint efforts as a response to this trend, building ambitious platforms to assist the consumers in realising the potential they have, the Utility then being a market enabler.
- Digitalisation and AI as another key trend shaking up the market.
- The need for collaboration between different cities and different partners, sharing knowledge and especially sharing data.
What scenario will prevail in the development of the future utility business model in the smart city realm?
A likely future scenario is multidimensional, according to António Messias, the Head of Inovgrid European Agenda Office and Board of Directors Adviser at EDP Distribuição. It will be a future where the Utility focuses on the End User and the services it can deliver to them.
Additionally, it was said that it is a complex scenario, where the image of the energy provider is not there anymore, where an “Engie” presents itself as a mobility company on one side and a “Tesla” presents itself as an energy company on the other. The real challenge for the Energy sector is to figure out who is its competitor and who it needs to collaborate with.
For Martin Runge, Chief Digital Officer at Siemens Digital Grid, the future is not as gloomy as it looks for the Utility. There is great potential for these 3 areas:
- on the renewable generation side
- on providing support for critical infrastructure for a stable and flexible grid
- as a retailer
The scenario of Singapore is shaped with pragmatic regulations, but with room for innovation, according to Terence Gan, Regional President (Europe) of the Singapore Economic Development Board.
What about the leadership model necessary for utilities to be ready for this future?
In a context of growing competition, leadership is needed for change to happen sooner rather than later. But what sort of Leadership? Perhaps one that sets specific and clear KPIs for the utility based on its various potential roles as a reliable infrastructure operator or as a service provider. Additionally to conversion planning, which is needed to get all the stakeholders (automotive industry, city planning and Energy sector) wrapped up in a common solution. Also, a more risk-taking approach, perhaps, to find new opportunities, looking at innovation from outside-in. In the end, it is about authenticity and clear values from the management, but also not being afraid to take tough decisions.
The panel ended with the consensus that it is a multifaceted scenario because it is a complex market in which the utility has a specific role, as market enabler and stabiliser, with obvious differences from city to city.
This discussion lives on beyond EUW as the sector is in need of more discussions to align the growing number of stakeholders’ goals. However complex the future is, this panel ended with optimism on where the Energy sector is going and on the future role of the Utility.
I look forward to seeing what will happen and how the utility will change!
Contributor: Florence Coullet, Content Director, EUW