Market Insight

European Utility Week 2017 – The many faces of digital transformation

October 06, 2017

Thomas Frashier Thomas Frashier Analyst, Smart Utilities
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European Utility Week was held this year in Amsterdam from October 3rd through 5th. As the leading annual European tradeshow for the utility industry, this event routinely serves as one of the best opportunities both to catch up on the latest developments in the industry, and to share visions for the future.  Five of the IHS Markit Smart Utilities Infrastructure and Solar teams were in attendance to research the latest trends – where all roads lead to digital transformation of the industry.

Digital transformation is the recognition that as the modern utility industry changes how it collects information and faces new challenges (such as renewable integration and the rise of more engaged consumers or prosumers) the utility itself must change how it thinks and operates.  The movement is away from post-event, experience-based action and towards more dynamic, data-driven operation.

While the idea of a digital transformation had been present for several years now, this year the significant majority of attendees and exhibitors seemed to have truly internalized this concept with separate, distinct sections of the solution appearing – most notably the separation of communication specifications, leveraging data, and coping with disruptive grid-level technology.

The evolution of the IoT discussion

The narrative from the last two years of the show has centred on how to transfer the data as IoT started to dominate the discussion. In particular – who would win the race between LoRa, SIGFOX and NB-IoT?  Yet despite the widespread conversation, the concept was still far from being understood – especially by utilities themselves. This year, IHS Markit saw a significant shift in language and maturity of concept as the general tone changed from the broad strokes of ‘IoT’ to the development and deployment of software and services, leveraging the data created from a more connected utility industry.

It matters less which exact technology is used and more about what the data itself can be used for by the utility.  In terms of the show floor it means less prominence for the various communication standard logos and more space for the outcomes and diagrams.

Ultimately there will always be more than one way to achieve the same outcome – none more highlighted this year by the various solutions for low voltage grid monitoring.  For example, from the high-end grid-scale solutions by the likes of Siemens MindSphere and GE Predix, through start-up companies offering “on-the-top” solutions such as the DEPSys GridEye solution, to using smart meters themselves to create low voltage grid mapping such as the NES Patagonia solution.

One interesting area to keep an eye on for future years could then be the rise of edge analytics – either on devices or across the communication network (e.g. data concentrators) – as utilities retrain their brain to make sense of the increasing number of data points and decisions.

Disruptive influences on the distribution grid

The next wave of uncertainty for utilities then focuses on disruptive technologies on the distribution grid; in particular the role of the consumer, the integration of renewable microgeneration and storage, plus the future demands of e-mobility.

For example, E.ON launched its Solar Cloud system, which allows energy generated from a customer’s PV system to be virtually consumed at a later time (essentially using the grid as a free battery), and it will also soon allow the electricity to be used at other locations, such as second homes or to charge an electric vehicle elsewhere in the network.

The key driver of this again comes to the digital transformation of the utility solution – more and better data is needed, both for utility and for the consumer themselves. 

The future outlook for the competitive, collaborative industry

In such a complex and changing market, there is unlikely to be a single point in time at which both vendors and utilities determine the picture is clear and ready for adoption – instead the picture will continue to evolve as each utility moves ahead with their own projects. One potential stumbling block for the industry is the natural (and necessary) picture of competition over collaboration. In the face of new and competing solutions, there is some sense of paralysis by choice for utilities, and indeed the pressure to do everything at once.

While there is much to be gained on the journey of transformation for the industry, greater gains will be realized through a collaborative effort on the part of suppliers to educate and clearly outline the steps for utilities. A clear vision, broken into small steps will be key to bolster the confidence in utilities to commit to the journey one function at a time. The digital transformation will be collaborative and modular, and already today we have begun to see many of its faces. 

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Power & Energy Technology
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