KuppingerCole Report

Advisory Note

By Anne Bailey

Emerging Technologies Fostering Digital Business Innovation: Utilities & Energy

The energy and utilities sector will need to adapt to new industry trends of digitalization, decentralization, and the advent of a new type of consumer: the prosumer. Smart grids are a more efficient offering for energy management, and new business models beyond the prosumer will require the partnership of different actors in the industry. Emerging technologies like artificial intelligence (AI), blockchain, and IoT have can contribute to achieving these goals, but they are most impactful as supportive technologies that enable a deeper company transformation.

By Anne Bailey
aba@kuppingercole.com

April 7, 2020

Content of Figures

Figure 1 Technology Trends in Utilities and Energy Industries
Figure 2 The Changing Ecosystem
Figure 3 Drivers Affecting Business Models in the Energy and Utilities Sector
Figure 4 Comparison of AI Use Cases Based on Profit Orientation, Internal/External Orientation, and Maturity
Figure 5 Data Inputs for an AI-Based Energy Consumption Analytics Use Case
Figure 6 Data Inputs for an AI-Based Inspections and Maintenance Use Case
Figure 7 Data Inputs for AI-Enhanced Digital Twin Use Case
Figure 8 Data Inputs for AI-Based Predictive Analytics in Edge Devices Use Case
Figure 9 Data Inputs for AI-Based Document Management
Figure 10 Data Inputs for an AI-Based Chatbot Use Case
Figure 11 Comparison of Blockchain Use Cases Based on Profit Orientation, Internal/External Orientation, and Maturity
Figure 12 Process Improvements in Utilities Billing with Blockchain
Figure 13 Process Changes to Microgrid Coordination with Blockchain
Figure 14 Process Improvements to Purchasing Renewable Energy Certificates with Blockchain
Figure 15 Process Improvements in Energy Provision to Underserved Markets with Blockchain
Figure 16 Process Improvements for Dynamic Energy Pricing with Blockchain
Figure 17 Comparison of IoT Use Cases Based on Profit-Orientation, Internal/External Orientation, and Maturity
Figure 18 Examples of Smart Devices for Utilities System Maintenance
Figure 19 Examples of Smart Devices in Decentralized Grid Management
Figure 20 Smart Functions of Advanced Metering Devices
Figure 21 Role of AI, Blockchain, and IoT in Delivering Digital Identity Use Cases
Figure 22 IDoT Management and Emerging Technologies
Figure 23 Decentralized Identity and Emerging Technologies
Figure 24 Risk-Adaptive Multifactor Authentication and Emerging Technologies

1 Executive Summary

Utilities and energy companies are still relatively early on the path to digitization. Company structure for this industry has typically favored stabi ...

There are many potential use cases for emerging technologies in this sector, but only a few stand out as being sufficiently stable for potential adopt ...

2 Highlights

Future energy and utility trends will likely be digitalization, decentralization, and migration to a prosumer model
Most utilities and energy com ...

3 Competitive Landscape

The utilities and energy sector is under pressure from public sentiment, perceptions of sustainability, and the expectation to consistently deliver un ...

To reflect the heightened sensitivity to consumption and resource sustainability, future energy systems will likely prioritize shifting to a more dece ...

3.1 The Energy Prosumer

The future of the earth under increasingly extreme climate pressures is becoming a top concern of private citizens as well as regional and national go ...

3.2 IoT-Based Efficiency Services

The rise of IoT devices means a new age of efficiency, for utilities companies and their customers. Industrial IoT provides new insight into operation ...

3.3 Smart Cities

In some ways, the smart city is the ultimate achievement for and of decentralized technologies like IoT-based efficiency services and smart grids. A c ...

3.4 Identity Verifier for Decentralized Identity

Decentralized Identity is a philosophical concept that allows the user to be the sole owner of their own personal data and reveal data to other partie ...

4 AI in Utilities & Energy

Artificial Intelligence allows companies to automate repetitive tasks and leverage mathematical analysis. AI in the utilities and energy sector includ ...

4.1 AI Use Case Suitability

This comparison matrix identifies several AI use cases for the utilities and energy sector. A strong AI use case leverages the availability of histori ...

4.2 AI Use Cases

Energy Consumption Analytics
Renewable energies like wind and solar are variable, dependent on meteorological influences. The variable supply creates ...

Grids supported by vRES experience regular drops in power generation, for example at night when no solar energy is collected. This is incongruent with ...

AI-Enhanced Digital Twins
Digital twin technology creates a virtual twin of a real-world object for its entire lifecycle, including mechanical design ...

Digital twins produce simulated data and stream real-time data, making them a natural input source for AI models.

Digital twins produce simulate ...

For example, electric vehicles can provide stabilizing energy to a renewable energy grid. When an electric vehicle is at a charging station but not in ...

Chatbots
One of the closest AI enabled customer interfaces is with chatbots. Using NLP, chatbots can answer customer questions on demand, recommend p ...

4.3 Implications of AI Deployment

AI deployment in this sector has the potential for significant improvements in efficiency. The accuracy of forecasts, coordination of edge devices for ...

5 Blockchain in Utilities & Energy

Blockchain has potential to improve transaction speed and reliability as well as energy grid coordination for the utilities sector. Applicable use cas ...

5.1 Blockchain Use Case Suitability

There are several use cases that incorporate blockchain into the utilities sector. These take advantage of blockchain’s strengths: its decentralized ...

5.2 Blockchain Use Cases

Billing
Energy billing can benefit from blockchain solutions when supported by IoT smart meters. Current methods for billing often require meters to ...

Blockchain-supported billing solutions depend on the adoption of smart meters. This would be a costly investment either borne by the customer or by th ...

An emerging solution is to connect microgrids via the blockchain. A blockchain solution capitalizes on its immutable ledger functions to receive data ...

Energy Provision to Underserved Markets
Energy grids have consistently been inadequate in serving rural and undeveloped areas. Extending a national g ...

Blockchain-based marketplaces also can facilitate microtransactions between peers which enable local energy production and trading for areas that are ...

5.3 Implications of Blockchain Deployment

For the energy and utilities sector, blockchain provides solutions to very specific problems which often are solved with other existing technologies. ...

6 IoT in Utilities & Energy

IoT in the utilities sector is essential for most AI and blockchain solutions. IoT use cases include inspections and maintenance of systems, decentral ...

6.1 IoT Use Case Suitability

Measuring the suitability of IoT use cases in the utilities sector depends on several factors: the real-world objects such as machinery, meters, etc. ...

6.2 IoT Use Cases

Inspections and Maintenance
Smart infrastructure management for utilities providers yields insight to machinery operations, maintenance, and lifecycl ...

Smart infrastructure is a key component in multiple digital transformation topics in utilities:

Connecting operational technology and information ...

Smart weather stations are critical to managing many renewable energy sources due to the obvious effects that cloud cover or weather patterns have on ...

Timestamped energy usage allows for accurate billing that incentivizes energy consumption when demand is low, while charging a premium during peak d ...

6.3 Implications of IoT Deployment

Implementation of IoT devices and sensors has already impacted the energy and utilities sector. Industrial implications are for significant cost savin ...

7 Digital Identity in Utilities & Energy

The increased use of IoT devices requires robust, secure, and standard identity management for these devices. Managing the identity of things (IDoT) i ...

7.1 Role of Emerging Technologies in Delivering Digital Identity

Of the emerging technologies, IoT is the main driver for implementing digital identity. IoT devices are consumers of identity services, meaning that e ...

7.2 Digital Identity Use Cases

Identity of Things (IDoT) management is necessary for the digital transformation of the energy sector, and enables the convergence of OT and IT. Gener ...

Decentralized Identity a philosophical concept that allows the user to be the sole owner of their own personal data and reveal data to organizations o ...

Risk-adaptive multifactor authentication (MFA) is now a security standard, which has stimulated a rise in AI-based MFA options. However, MFA does not ...

7.3 Implications of Digital Identity in the Energy and Utilities Sector

Digital identity as it relates to IoT devices is crucial to the digital transformation of this sector. Developing a robust, secure, and standard metho ...

8 Recommendations and Conclusions

Emerging technologies have a lot to offer the energy and utilities sector. However, they are not the only means to matching new industry trends of dec ...

9 Related Research

Advisory Note: Emerging Technologies Fostering Digital Business Innovation: Finance Industry – 80264
Buyer’s Compass: Decentralized Identity – 80050
Advisory Note: Demystifying the Blockchain: What Makes a Blockchain Useful to a Firm? – 80301
Leadership Compass: Privileged Access Management - 79014