Introduction
It has taken awhile for technology to catch up with societal needs in the energy sector; but how does this look when thinking about creating a sustainable digitization pathway for the retail energy commercial customer? This essential change in transforming how commercial accounts are connected to the retail energy supply chain so we will take a little dip into highly relevant topics all focused on the progression and mass market uptake of a completely digital, two-way relationship between commercial end users and retail energy entities.  Â
Technology Evolution
So, let's consider how meter data has evolved into a living breathing indicator of commercial end user needs; and how has that shaped customer profiles and energy decision-making. The smart meter evolution is ongoing; but in most retail energy markets it is a required piece of technology because retail energy is highly effected by market conditions. Without this smart meter, we can not compare aggregate or real-time usage and demand for energy products in a timely manner. Let's take a quick step back...What does the smart meter offer? A smart meter offers end us a cumulative indication of what each commercial customer load represents in a blueprint of energy demand. We know It has traditionally been used to paint a picture of how energy efficiency or demand management has impacted an operation. Now we have smart meters painting a more detailed 3-D model of energy use down to a very granular level. I call it 3-D because we have a cumulative roll up, system roll up, and individual point of delivered load. Within this data, we can see exactly where improvement can be made and ultimately where action can occur. To date, the action has been a mix of manual and digital processes. We as technology providers are charged with presenting this data and creating opportunity to understand it first, then make it actionable all within a single interface; but to date we have relied on account reps or end user representatives (brokers, consultants, etc.) to take information, analyze it, extrapolate pertinent data points, and make recommendations that may or may not be immediately actionable. These interactions with end users, their reps, and the retail energy supplier can take days or maybe even weeks to develop. So, the key is to capture the data, automate analytics, adjust profiles and energy blueprints, then offer actionable tools to enable self-directed energy decision making in hours or minutes. By eliminating waste in time, because we all know time is money and as we learned in Texas time is even life or death, businesses can lower risk and improve operations creating a secure, digital pathway to their energy security.
There are some continued trends that will enable investment in creating this pathway. In fact, the Current Trend is that Buildings still account for nearly one-third of global final energy consumption and 55% of global electricity demand…that is not going away. Electricity demand growth in buildings has been particularly rapid over the last 25 years, accounting for nearly 60% of total growth in global electricity consumption. In some rapidly emerging economies, including China and India, electricity demand in buildings grew on average by more than 8% per year over the last decade. In fact, it is reported that electricity use in buildings is set to nearly double to around 20 PWh in 2040, requiring large increases in power-generation and network capacity.
Digitization, including smart thermostats and smart lighting, could cut total energy use in residential and commercial buildings by as much as 10%. So we know that commercial buildings are the major energy demand source in the world so how have evolved and adapted to handle this segment over the past decade or so? Has technology evolved well enough to enable change? Well lets jump into the evolution of technology, new digital energy profiles, and data flow.
Transformation
Well the business model has changed significantly now that mass market adoption of EVs and Onsite Generation has begun to ramp up. Now we have a true, two-way power flow relationship between commercial end users and retail energy providers where each entity is truly dependent on the other. Traditionally it’s been more one-way with supply and demand driving the need; but besides enabling data and information for customers to make real energy decisions, the digital transformation is reshaping the energy value chain which as you know has also evolved toward a more diverse, decentralized network of lower capacity, more flexible generation where more diverse energy options can be presented to commercial end users. The trouble is what is presented, when should it be presented, and how quickly can this become a transaction. For the retailer its about capturing the needs of the commercial customer, interpreting the data and information about the customer through its digital profile, and creating a demand for energy products that can automatically be procured by the end user based on their set criteria, then capturing this revenue. For the commercial customer, it is about transparency, flexibility, and security in that they have options to choose that include their own resources presented in a single view where decisions can be made as I said earlier in hours or minutes. Based on a recent IEA report, Digital energy security should be built around three key concepts:
Resilience, i.e. the ability of a nation, system or institution to adapt to changing contexts, to withstand shocks, and to quickly recover or adapt to a desired level of stability, while preserving the continuity of critical infrastructure.
Cyber hygiene, i.e. the basic set of precautions and monitoring that all information and communications technologies (ICT) users should undertake. This includes awareness, secure configuration of equipment and networks, keeping software up to date, avoiding giving staff and users unnecessary system privileges or data access rights, and training.
Security by design, i.e. the incorporation of security objectives and standards as a core part of the technology research and design process. Â
If these tools exist today, and we already know the environment for a true and complete digitization pathway exists between retail energy providers and commercial end users, than what can be done to affect behavioral change to enable this seemingly digital relationship, and how do we not lose sight of the humanization factor in this process? I know every utility regardless of their connection to the customer first spends a lot of time and money to acquire this customer, and second does not want to lose this customer so the experience and ultimate satisfaction of this customer with the products, services, and human effects must always be first in mind while building and developing this let’s call it “neural pathway”.  So how do we move forward?
First and fore most digital transformation must be executed within a framework of safety and security. Energy companies typically operate with an engineering mindset focusing on safety, security, first; but a digital transformation is really the opposite approach and it is about taking some calculated risks while embracing an acceptable level of failure so in the end it is somewhat experimental but the experimental aspect can be controlled and tested to a very high level of integrity so once we go life commercial customers that are being engaged on another level understand and accept the risks. For example, it could be that a more predictable energy load would perhaps just benefit from diversifying their long-term energy requirements with an on-site generator whether its solar, gas, or other. They place this into service during peak times to offset higher retail energy costs; or you have a constantly changing load shape with an end user that would benefit from more volatile choices and demand a greater mix of retail energy (block and index, variable, time of use, hybrid, on site generation, etc.). The small to midsize business segment would be a great segment to do this experimenting as they are more than often accepting of some risk to gain a greater reward; but of-course maintaining integrity in safety and security so they know they will have energy and not experience any operational disruption but may end up paying a little more in the process. The upside is great in looking at real-time, data driven pricing product offerings though so it is really about risk and target markets that would be willing to take a little risk. All this said though, technology is the enabler in creating and driving this transformation because we can expose these options all within one interface and once commercial customers get more savvy with the tools they are being offered, they will innately become more confident. This may be a subculture within today’s utility but in the retail space it should and will be the status quo for success.
Secure Energy Future
Speaking of status quo, let’s look at what the future status quo looks like…what is it and why is it important, what does the evolved savvy entrepreneurial commercial customer profile look like? What does their energy blueprint look like? Will technology be able to fully support the growing? Well in a recent Celerity survey of key stakeholders that were polled on digitization and transformation found that 63% of leaders said that COVID-19 has made their organizations embrace digital transformation sooner and it is now their top priority. So just starting with our current state of supply chain challenges and business disruption that COVID has created, and now layering in new digital directives with supporting staff, it has made it harder to move this transformation into a transition mode. It really becomes a matter of priority, but the poll also says that 78% of leaders are optimistic that their investments in digital technologies will pay off; but in the same vein, senior level stakeholders responsible for undertaking such transition close to half cannot implement new digital tools at the speed and accuracy management expects and that they lack the qualified resources to advance as a digital leader. So, while technology transformation has indeed occurred the human factor is an issue even without a global pandemic. In the end, COVID-19 has accelerated the retail customers needs in certain areas. The need for a digital pathway to energy has become very important; but the question remains how do we get the things that retail customers need to them in the way that they want them and when they want them?” What does the current and future status quo of the retail energy provider look like with regards to digital transformation, and their willingness as well as ability to properly transition into a modern utility creating a completely digitized pathway for the commercial customers?
So just to cite the recent Celerity survey again, which revealed that leadership is keenly aware of the role that digital transformation can play in not only driving businesses forward, but protecting their companies from future shocks. Whatever our “new normal” ultimately looks like, it’s clear that successful digital transformations will set companies apart from their competitors. A few key takeaways from this report: For all of the ways in which the past year has been without precedent, none of these trends are going to evaporate whenever we come out on the other side. If anything, the opposite is more likely: These trends are going to become more entrenched, and more closely connected to business outcomes, down the line. Any of the forward-thinking leaders will operate with that in mind—using these trends as a foundation for thinking critically, investing strategically and making necessary changes to their business models. Organizational leaders recognize that, in order to realize the full value of digital transformation, they need partners capable of augmenting their digital capabilities. Allocating capital in tech investments can empower increasingly agile and remote workforces. Organizations that succeed here will see bottom-line value like never before. People and technology aren’t mutually exclusive. Competitiveness is going to be as much an index of tech capabilities as it is of outcomes around hiring, engagement and retention. Just to tie this back to our webinar theme, commercial and residential retail energy customers are more savvy and demand the most reliable, flexible, and secure digitization pathway available. The technology exists to enable detailed, down to each load, energy demand needs by end use. We have been mass market transformation mode on smart metering for over a decade and now we know we have this massive amount of data to work with not just outage restoration, that is just playing defense. Retailers need to go on the offensive, completely digitizing a two way power connection with customers and enable a real-time, safe, secure relationship without losing the humanization factor. Â
We understand you have options where you can spend your time and we hope this content was thought provoking and will help you in making strategic decisions and investments in creating reliable digitization pathways for retail energy commercial customers.