Already, we are seeing a rise in competition from other sectors: automakers are now offering home solar and storage solutions to complement the roll-out of the next generation of electric vehicles. Oil majors have bought electric vehicle charging companies and even retail energy suppliers, giving them access to the domestic market for the first time. Time is short to radically reinvent business models and mindsets in response to these changes. But, while the industry is possibly facing its biggest challenge yet, the opportunities are equally vast.
Digital disruption is a license to innovate. Utilities, long characterized by a risk-averse, engineering-focused mentality, can redefine what it means to be an energy company.
One way this could manifest is through the adoption of a more open and outward-focused perspective that encourages greater engagement with the communities in which they operate. For example, we are seeing cases of utilities working with cities and neighborhoods to build microgrids that bring power to previously off-grid – and excluded – communities. In one Ghanaian farming village, the solar microgrid installed by an American start-up now allows for the refrigerated storage of life-saving yellow fever vaccines. And in Tanzania, the introduction of solar is helping to improve children’s school grades: electricity means they can study at night (pdf).
In developed markets, innovative applications of digital technology can ensure that the benefits of renewables extend to those who don’t own their own homes or are on lower incomes. In Sydney, Australia, for example, the “Stucco” apartments – home mostly to students – installed solar power and batteries, and built an “embedded network” to share the energy generated with all residents.
Energy transformation can build a better, more inclusive world
Stucco’s story is a great example of how a digitally enabled energy system can bring affordable energy to all parts of the community. But it comes with a cautionary footnote – the initiative took months (and lots of pro bono legal support) to win regulatory approval.
This highlights a key truth about the energy transformation: it’s not by any means just about the technology. Digital will enable changes – but those changes have to be driven by a commitment to energy justice across sectors, global agencies and governments.
A collective vision can harness the potential of the rapidly accelerating energy transformation to finally empower communities – and build a better, more inclusive working world. And I believe the following key actions are necessary to work toward this vision:
- Energy companies need to have the courage to engage with their communities in new and collaborative ways;
- Utilities should reach across sectors and join forces with more unconventional partners; and
- Government need to step up with energy policy and initiatives that encourage, rather than hinder, innovation.
Summary
The transformation of the electricity sector offers business and government an opportunity to democratize access to energy. Will they be ready to seize it when the energy world changes forever?
