Transformation in the world of energy to create a sustainable future.

Energy companies have a significant role to play in orchestrating the electrification of society and are now stepping forward to drive this change and transform the way society is consuming energy.

On the 1st of December, 2020, I had the pleasure to join the Future of Utilities summit the UK's leading energy & water summit to provide a keynote speech on energy companies' role and our joint responsibility in building a sustainable future.

The full video of the speech is below (26 mins long):

Alternatively you can read on for a summary of the key messages and slides used.

We all struggle to comprehend the rate of change of technology and the revolution that society is going through. All businesses need to consider the role of technology and how influential this will be in the future relevance of the business and how this can be applied to existing business models and the new models it creates for the future.

The exponential rate of this change and how it is impacting humanity can be easily seen in the slide below. However, the incredible change we experience from the industrial revolution to the invention of the Internet has created a whole set of unintended consequences. Arguably the impact on the environment and climate change started with the industrial revolution and the creation of the internet and the hyper-connectivity of society has lead to the weaponising of the internet, creating to societal upheaval, influencing of elections, destabilising democracy and creating power outages from systemic hacking of the energy system in the Ukraine.

The biggest change we are seeing is climate change. Humanity has already created a 1°C change in global temperatures, with the World Meteorological Organization confirming the last 4 years have been the warmest on record (World Meteorological Organization, 2019). This change in the global temperature has led to a significant impact on weather patterns and ultimately an economic impact on society (European Commission, 2018). When you see what is happening with the climate change described here as CO2 levels by year, it is time to take a moment and reflect on the changes happening. CO2 and temperatures are no more consistent and rising drastically. So we as the energy industry have the opportunity to step forward as change-makers and support society to tackle climate change.

Humanity has been very fortunate to develop in a period of very stable temperatures, this period of stability has lead to all the innovations we have seen, without which I doubt society would have been able to develop to this stage.

Photos of nature taken at different times already give us an indication concerning what is happening e.g., already in many mountain regions in Europe new walks are available which allow you to retrace the diminishing glaciers, and the walks are kilometers long!

To tackle the consequences, we all need to change how we live every day. It is incredible to consider that a pack of blueberries originating from Peru has been flown 10,000km to be eaten with my breakfast! Not to mention the amount of plastic used to store this food.

So we need to ask ourselves "Can we afford to fly our blueberries from Peru, which is approximately 10.000km away from the UK?"

But individual sacrifices will not be enough, and as a society we will all need to come together. Fortunately we are seeing society is waking up to the impact for future generations. This movement will pressure and influence politicians and business to adapt business models and support the energy transition. No one company can solve this issue alone; we need to come together to make a significant difference.

We see now that the governments are also starting to wake up to this change driven by societal pressure. Some examples include the EU with the Green Deal, the UK with ￡12bn investment in green recovery, and China, which is currently one of the largest producers of CO2 make a pledge on carbon neutrality by 2060. All of which is great news for us.

How do we drive consumer adoption and ensure that the industry is bringing affordable solutions to customers? We need to think if we should have higher pricing for CO2 or incentivize people to move them to more technological and sustainable solutions such as incentives for e-mobility or renewable assets. It is fascinating to see that energy is a critical part of each of the industrial revolutions we experienced. As we advance, we need a new societal revolution that is more sustainable and supported by everyone.

Having seen Rachel Botsman speak at a couple of events, it is worth watching her speech (Ted Talk) or reading her book on collaborative consumption as these concepts started the thinking about the sharing economy before AirBnB and Uber and ultimately lead us toward circular economies and more localised production in energy and other industries such as agriculture.

Energy companies have a significant role to play in orchestrating the electricification of society and are now stepping forward to drive this change and transform the way society is consuming energy.

This change will require a fundamental transformation in energy companies. This will increase the importance and need for investment in technology to digitalise the core of the business. Companies will need to modernise or replace legacy systems to ensure that the business can quickly adapt to the evolving change in the energy ecosystem, improving time to market and being more flexible to meet the new needs and demands of our customers and society. As society continues to become hyper-connected and new distributed energy resources will become smart and combined with other data from homes, communities and cities we will have a huge opportunity to use the data from the system to create transparency and drive efficiency in our energy grids and energy usage with our customers. We will also see increasing connectivity across industry sectors creating new opportunities to grow businesses in adjacent sectors.

At E.ON, we have built a digital transformation programme across the business over the last 5 years. This holistic programme has had the objective to put digital and data at the heart of the organisation. Transforming and building new capabilities and culture to drive this business change enables us to take advantage of the benefits of digitalisation to the business supporting our sustainability objectives.

We use digital platforms to be more agile and cost-efficient. We have invested in new solutions such as E.ON NEXT in UK which will re-platform the business and customers of E.ON and NPower. Whilst in Germany we have built a Digital Attacker using state-of-the-art software solutions driving a lower cost-to-serve, improved time to market and better customer experience. Already these platforms are serving millions of customers, improving the bottom and top line and increasing our competitiveness in these markets.

One area I am most proud of by our teams is how we are driving real innovation through technology. As the complexity of the business models and amount of data increases we see that traditional computing will not be sufficient to process the huge volumes of data once the models are truly scaled. One business model that we are already starting to see huge potential is in vehicle to grid - this is the balancing of energy demand from the grid with electric vehicles and their stored energy. These algorithms will need to connect millions of electric cars to the grid for storage of energy and balancing of the grid. Ultimately your electric car or connected renewable assets will be trading energy on your behalf. Traditional computing will not be able to manage the processing required, for this reason our team is working on algorithms for availability forecasting, bid optimization, and live steering that are running on quantum computers.

E.ON is already using data right across the business, one such example is where we pull data from our grids, add additional data such as weather forecasts, and combine it with IoT capabilities to digitize our grids and ensure that we can efficiently manage the grids with predictive maintenance but also improve service quality with reduced outages for the customer. The digitalisation of the grids will ensure that we able to support more decentralised sustainable assets being connected in the future and help municipalities better understand local consumption aligned with sustainability objectives.

Having the data is a great asset as we can play that data back to our customers as we do in some municipalities in Germany. Using the data we get from our grids, platforms and systems, we present it back to our customers to help them understand how they consume energy. As we all understand better our consumption habits, including how energy is produced it drives us to make the right decisions on adding more sustainable assets to the system locally and ultimately to new business models such as local trading of energy between consumers and producers. This enables us to optimise the energy flows between sources on the grid and utilise these assets most efficiently.

At E.ON our ambition is focused around creating a better tomorrow and sustainable communities, giving back to society, a great example from the Data team is our "Sustainability Mirror" where we show how sustainable a city is and what actions they could do to be even more sustainable in consideration of different metrics from their energy usage to the public transport network.

We are increasingly seeing the benefits of connecting renewable assets, the data they produce with software to create new business models for our business. Already we are deploying our software to help customers manage their homes using E.ON Home. The customers' renewable assets are producing data which is played back to the customer through the software. I already mentioned the future potential from the digitalisation of emobility with new use cases such as vehicle to grid and grid digitisation.

One area where the teams in E.ON are doing an incredible job is looking at how cities are using heat. When you look at our cities' thermal flows, you see how much energy we are wasting. We can utilize this wasted energy and bring more efficiency to cities in a collaborative way. E.ON is connecting customers with complimentary heat usage to support a more efficiency and balanced use of the energy in the heating grid.

We start seeing situations where steerable assets are combined with buildings to deliver connected and efficient energy usage. See more here how E.ON is building the world's first ectogrid? at Medicon Village.

In Sweden we did a pilot with a Swedish village Simris to install the first energy system that is 100% local and sustainable with renewable power like PV and wind. We combined technology, data, and assets to be able to go fully off-grid.

In summary, no one business, community or government can solve climate change, however together we can all work to make a difference. Energy and utility companies can position themselves at the heart of the energy transition supporting climate objectives. Technology and preparing the business will be critical to this change.

Government, businesses and society must come together to create a sustainable future where the power of WE has no limits.