Participants at the 16th Forum Solarpraxis, which took place in Berlin on November 26 and 27 and explored the components that will forge the next energy era, suggested that the future of the energy sector is digitization. The term is wide, encompassing all existing and forthcoming components of energy management, including PV, energy storage, e-mobility, software applications, etc.
Kirsten Hasberg, a consultant focusing on the energy transition, told the forum the energy sector will largely copy digitized market platforms like Ebay, an online auctioneer, and Amazon, an online retailer. “Google for example does not produce any of the content it uses. So I am wondering, when will I be able to buy electricity from my neighbour?,” Hasberg asked.
Digitization of energy focuses on customers
A basic driver boosting the transformation of the energy sector, said Holger Krawinkel of the MVV Energie Group, is the value creation potential for companies that stay in touch with their customers. And value creation nowadays is continuously shifting, because of the intense competition in the sector, he said.
For this reason, he argued, only business models that focus on the customers and start planning based on customers’ needs, not from the technology, will fit in the next energy era.
Who is fit enough to deliver the required change in the energy business models and provide decentralized and digitized solutions arising from the customers’ needs? Some attendants at the forum argued that large utilities are not needed to deliver such solutions. Rather, municipal energy companies are better at embracing change, they said.
And while large utilities supported the event this year, Michael Maxelon of Stuttgart’s municipal utility noted that one cannot ignore that this is the 16th Forum Solarpraxis and the utilities have only recently embraced the new model, in order to survive. Nevertheless, he said, municipal utilities are not so much aimed at large customers, but instead focus on the retail market.
On the other hand, Franco Gola of E.ON, argued that due to large players like E.ON having large customer bases, change via them can be more effective.
E.ON’s paradigm shift
E.ON’s business model U-turn, which was announced a year ago and focuses on renewable energy, has been well documented at the Forum Solarpraxis. Last year, and only a few days before E.ON announced its new strategy, Gola spoke at the event. He said that by investing in the green energy sector, the company was moving away from its core business.
This year, he suggested that business innovation is a key to the new, decentralized and digitized energy era and for this reason, his team is interdisciplinary, combining the skills of various people – engineers, marketers and others, for example – who work together side by side.
Moreover, the team, which is based in Munich and crafts a set of energy management solutions that include solar PV, energy storage and other technologies, was comprised of just 20 staff a year ago, but today has increased to 80 people. This is a step forward in capacity and know-how, Gola noted.
His enthusiasm raises questions given that only a year ago and at the same event, he had stressed that his team was often communicating innovative ideas to senior E.ON management without great success. “Business innovation rarely comes quickly,” he pointed out at last years forum. This situation has now changed, he told pv magazine at this year’s event. Following E.ON’s strategy shift, the team is encouraged to communicate new ideas and these are taken seriously, he said.
Nevertheless, Gola appeared to agree with the other speakers that clients will be at the core of the new energy business case and that energy providers will need to forge close partnerships with them.
His teams philosophy is that the business will shrink if the company sells only PV. Instead, the team believes there are many opportunities for E.ON to turn a profit, if the company develops an integrated business model that encompasses various, complementary technologies.
A critical point, Gola concluded, is how much know-how a company needs to position such a service in the market so that it can offer an integrated solution that makes sense to the customer and is not just a piecemeal business.
Last but not least, energy stakeholders at this year’s forum agreed that the digitization of energy is more difficult than in other sectors, because energy is heavily regulated.
From one point of view, strict regulations in energy make sense because security of the network is vital for any economy and the everyday life. But from the other point of view, lawmakers should also try to understand the changes taking place in the sector and facilitate its digitization by alleviating it from regulatory bottlenecks.