After Europe’s Sweltering Summer, my Top 8 Digital Energy recommendations to execute Europe's vision 2050

The so-called Old World is out front in embracing the new world of energy transformation. 

It’s no secret that the European energy market has been among the globe’s most dynamic and active in this current era of disruption. Because the region’s networks are solid, without a lot of blackouts, European power providers have the opportunity to focus on the future and seek greater energy efficiency. It’s a great position to be in.

So, as I prepare to meet with hundreds of GE Power’s Digital Energy customers at our annual EMEA Users Conference next week, I want to outline top innovation opportunities for customers in this region -- and a few potential challenges ahead.

+ Convergence

One trend on the horizon? Convergence. Around €5B (R&DD) has been invested in SmartGrids transformation in Europe, with around 950 projects currently taking place (2002-2017). As in other sectors, such as telecom, aerospace, and automotive, digital transformation in power will see IT and OT converge, and give power players a much better picture of how we can optimize operations. 

By 2020, we expect 72% of European customers to be equipped with smart meters. This transition means customers monitor and manage their consumption better, and companies can also use the data gained to be more predictive, flexible, and creative.

+ Conversions

We’re also going to see more conversions. With all of these energy technologies and conventional and renewable energy sources, we’re likely to see new approaches to optimizing energy distribution and storage. No longer will we look at electricity in isolation, but rather as a smart energy-holistic system that converts gas, electrical, and heat networks and identifies the best source to meet the need. At the same time, new perspective is to be gained on converting power for storage to give greater flexibility in times of need. 

+ New Business Models

With digitalization we’ll be able to create business cases that clearly articulate the value of each new initiative. For instance, a GE study tell us that 1% better efficiency in five sectors — power, oil and gas, aviation, healthcare, and transportation — will save $276B over the next 15 years.

+ Job Creation

The energy transition will also have a positive impact on job creation. IRENA, the International UN renewables organization, suggests we have 10 million jobs in the energy sector today, and if we continue with business as usual we’d reach 15 million by 2050. But, with continued efforts to decarbonize, a digital intensive transformation, job creation instead could reach 30 million by 2050. So, digitalization is not just about identifying technical values, but also socioeconomic impacts too.

Managing Transformational Change

I’m optimistic about the state of Europe’s energy sector. Yet, I’m no daydreamer. We still have some challenges to address. Here’s my short list to watch out for:

– Incomplete Change Management

We’re capable of true and sophisticated transformation with the technology available today, but many energy organizations still lack confidence, speed, and completeness in making changes. Organizational complexity and politics often pit those who want to evolve against those who are worried about change.

– Short-sighted Regulations

Market and policy regulations too can slow our progress if inefficient regulations are issued. The goal should be facilitating innovation — as long as privacy and security concerns are addressed. Look at countries such as Finland or Norway, which are working to make energy customer information widely available and thereby enabling startups and existing companies to find new opportunities.

– Pilot Paralysis

Another big problem I see is companies resisting risk. Many organizations are relying on pilots — over and over again. But, using data to make solid business use cases and predict future value, we should embrace the knowledge gained from a pilot and move on to the next phase in the transformation, rolling out robust, forward-thinking projects. Evolution is happening rapidly. Many initiatives that used to be research-led are now becoming innovation-led, which means at the end you get things done and go to market. 

At GE’s EMEA User Conference, I look forward to talking with our customers about how they are using the latest technologies. How are you using digitalization as an enabler and not just as a business objective? Let’s discuss it. In the meantime, it’s safe to say I’m looking forward to our sector evolving between now and 2050, thanks to the European Vision 2050 that ETIP SNET, an Energy Transition Advisory Board to the European Commission, just published in June. We’re going to see things moving really quickly in the next 10 years — as quickly as the telecoms industry has been moving. You can count on that.