Energy market still in constant flux, digitalizing helps adaptation

Sustainability and decarbonization as drivers

Both the consumer and business-to-business energy markets are increasingly being driven by a quest for reducing the present dependence on fossils. This effort has accelerated fast in Western Europe in recent times due to the political-military situation in the southeast.

Whenever decarbonization and renewable energy forms are discussed, electrification rises to the top as the solution. Decarbonization is the goal, achievable by shifting from fossils to alternative energy sources. Biofuels are a natural first source to look at, but they require additive components that need to be transported over long distances, somewhat negating the benefit.

This means the main contender for filling the gap is wind power, with solar power in second place. But how can we efficiently adapt our need for power to generation that relies on largely unpredictable, weather-dependent energy sources?

Technology and ecosystems as solutions

Investing in IT and OT solutions are the primary way energy industry actors are currently adapting to market changes, while the study also highlights strategy renewal, organizational changes, internal efficiency increases and new business models.

Ecosystems and cooperating are essential to cover the entire value chain. Cooperation between stakeholders is inevitable to control the system, manage it and gain insight into the value chain to be able to manage it from beginning to end.

Cloudification is a topical issue when increasing the level of digitalization and collaboration in the value chain. Public cloud seems to be the most efficient way to run solutions because of faster development cycles, avoidance of integration projects. Additionally, shared data is more easily accessible.

Customer empowerment a primary goal, but not without caveats

Insight over the value chain, customer experience and engaging customers as active players in the energy market, are seen as the most important benefits of digitalization in all Nordics. This trend has now become even more pronounced than in 2018.

In the next years, the energy consumption of customers will have to be managed more closely to be able to reconcile energy used and renewable energy provided.

Many energy companies already allow their customers with the possibility of monitor, control, and optimize their energy usage, but experience shows that consumers’ interest dwindles quickly. This is why there have to be ways of controlling energy usage to ensure security of supply. If market forces are unable to achieve this through pricing or demand response, the worst-case scenario could be authority-imposed rolling blackouts.

There is now also an opportunity for new energy actors to provide demand response services. These can be energy communities whose members both buy energy from the grid and sell their own micro-produced energy to the grid. Or it could be a company operating at many locations that feeds X kWh of its self-generated power into the grid and can offer its customers the same X kWh for charging their electric vehicles, for example, at times of lower consumption. The legislation, technology, payment systems and settlement methods already exist.

The four keys to a working energy future

To summarize, there are four intertwined issues that will ensure a viable and profitable future for energy while at the same time making sure sustainability and climate goals are reached.

New information and operational technology solutions allow a much bigger picture of the energy market and its optimization than traditional models.

Ecosystems are needed to make this work throughout the value chain, while cloudification as vehicle provides new way-of-working as platform.

Customer participation in the energy market therefore becomes possible, with demand response taking care of a fair distribution of availability in different situations.

Would you like to know more? Contact us and download the summary of the Nordic Energy Industry Study 2022 results.