Even if the climate crisis is currently having to share headline space with the global pandemic, it has by no means lost its traction. Nor have the perils of climate change lost any of its urgency.
Taking a global stance, I would say that the charge to lower carbon emissions is entering a phase more characterised by action than by jargon. When looking at the energy, utilities and resources sector, there is definite evidence of forward momentum.
Coupled with this, we’re seeing rapid developments in data-driven transparency, auditability, and collaboration, creating new opportunities to win and delight customers and service users, increase market share, and operate more efficiently (both in terms of business processes and environmental impact).
Against a market backdrop that might be the most volatile in modern history, there are three key trends that I see in store for the sector.
Joint-ventures and start-ups are fuelling renewable growth, but big oil clean up?
While 2020 was a bleak year in many regards, there is cause for optimism when looking at the continued growth of renewable, green energy such as solar photovoltaic (PV), wind and hydropower.
The IEA’s recent Renewables 2020 report notes that COVID-19 has failed to slow the development of renewable energy. In fact, in terms of new capacity-boosting investments, renewables will continue to be the fastest-growing energy source through 2025.
I predict that the growth of renewables will be fuelled by multi-disciplinary joint ventures and partnerships across the industry. In 2021 and beyond, we will see a growing number of major energy and utility companies team up with agile businesses, running the gamut from established enterprises to smaller start-ups, in an effort to reach both emission targets and create new, long-term revenue.
We are seeing ample proof of this process gaining momentum across the world, including here in Australia, with Horizon Power announcing plans to develop Australia’s first renewable hydrogen microgrid in remote Western Australia. The project will utilise solar and renewable hydrogen generation and storage to provide dispatchable renewable electricity to the grid.
“Behind-the-Metre” generation turns the industry on its head
The consequence of the trend towards renewables, is the proliferation of distributed energy resources (DERs). As the industry and private households continue to seek out new renewable avenues, like solar panels and geothermal systems to supplement their primary energy supply, over time they will increasingly bypass the traditional energy companies.
This will result in power generation and distribution companies losing a steady and previously locked-in source of revenue. While this disruption is certainly bad news for some, there is enormous opportunity for forward-thinking utility companies to capture new revenue streams.
In 2021 and beyond, we will see utility companies start selling and servicing DERs like solar panels directly to end consumers. These products are generally sourced from and serviced by specialised companies, but energy and utilities players are uniquely positioned to leverage their economies of scale and an established and far-reaching service workforce, to offer more choice, better payment plans to cover up-front costs, and a timelier service.
As major utility companies move deeper into the DER realm, the pressure will be on to deliver service experiences on an entirely new level – not measured by the traditional level of service but the moment of service that counts when it matters most. Similarly, moments of service need to be delivered efficiently and at scale. Suddenly faced with hundreds of new, small-scale assets to monitor and service, energy providers will need to make a focused effort to implement smart and predictive technologies such as artificial intelligence (AI), machine learning (ML), and digital twins to turn the flood of data into intelligible insights. In fact, IDC predicts that by 2025, more than 50 per cent of utility companies globally will increase investment in automating operations with an emphasis on edge, AI and ML technologies, thus doubling the penetration of predictive and prescriptive maintenance.
So, one of the major challenges facing market entrants is to find and deploy enterprise software that can operationalise unstructured data and turn it into great customer service.
Decarbonisation and data delivering customer service
Shipping and cargo represent another area where operationalising data can be turned into great customer service.
For the logistics industry, 2020 was a disruptive year. Nowhere is this more keenly felt than in air cargo.
Based on this global trend, I predict that in 2021 we will start to see a flurry of activity in the maritime sector in a bid to capture market share from its airborne cousin. Thanks to the inherent ability of ships to accommodate larger batteries and zero-emission propulsion systems, the sea cargo ecosystem will position themselves as the “greener” and more sustainable option.
This development will result in an arms race of sorts among shipping ports to offer the most streamlined, cost-efficient, and intelligent services to their customers and their customers’ customers. This new dynamic will drive the proliferation of technology such as AI, ML, and digital twins as a way of delivering supply chain transparency, traceability, accountability and, most importantly, a better-quality service experience.
For those ports and stakeholders that are equipped for this change, there is ample opportunity for revenue and market share growth. Success, however, will require agile business processes governed by a technological infrastructure that is modern, service-centric, and fit-for-purpose.
Goodbye to 2020
I don’t think anyone will be sorry to see 2020 disappear into the archives of history. But for all its bluster and disruption, I believe there is a renewed sense of purpose and determination among the players in the energy, utilities, and resources sector.
Discussions with customers, partners, analysts, and other stakeholders, see a genuine and broadly held desire to start delivering on the promises made over the past few years. The reason why I am convinced that the next five to ten years will be a period of unparalleled progression is because it will not only be driven by companies, but by people.
