Blog #12

SMART ENERGY - MASTERING THE ENERGY LANDSCAPE OF THE FUTURE

Authors: Dr. Stephan Anders
University of Cologne Business School

Digital transformation is swiftly changing the nature of business and organisational management, while the transition to sustainable energy also creates profound shifts in both physical and economic infrastructures. One of the most pressing strategic question for most organisations is not whether to focus on digitalisation of the energy landscape, but how: how can they transform systems quickly while maintaining operational stability as well as profitability and affordability? How does an organisation fit into the seemingly vast complexity of the digital energy future? Such fundamental questions require “smart” answers. From power utility giants to energy-intense industries, from municipalities to growth-oriented ”smart” businesses, the urgency of the need to address the threat of climate change increases. And yet the expectations of profitability and reliability remain. „Smart Energy“ subsumes all such aspects of the demanding change within the energy sector.

University of Cologne Business School together with it partner EWI (Institute of Energy Economics at the University of Cologne) is developing Executive Education Programmes to address the knowledge and skills needed for shaping the ernergy sector of the future. Such a „Smart Energy Programme“ addresses the complex role digital transformation plays in energy production, distribution and consumption. It also offers practical frameworks for devising a sophisticated deployment strategy. Core elements of digitalisation in the energy transition – demand flexibility methods like dynamic pricing, virtual power plants and smart city management – should approached from a technical as well as systemic angle. From the role of big data and machine learning in real-time digital energy transactions to anticipating the influence of regulatory changes and data privacy developments on consumer behaviour, leaders in the energy sector will have to consider a complex set of aspects to shape digital transformation inside their organisations. The energy landscape of the future can be structured along three building blocks that are designed to master the transformation process.

Smart Mobility

Almost one quarter of the European greenhouse gas emissions originates from the transportation sector. This not only puts pressure on the climate but also on the air quality in cities. While emissions from other sectors have been declining since 1990, emissions from the transportation sector are higher today than they have ever been. For that reason, the European Union pushes developments towards efficient transportation by leveraging digital technologies. This will bring many changes in technologies, regulations and business models. Changes that leaders in industry and politics have to stay on top of.

Smart Customer and Home

Digitalisation and technological innovation enable new smart energy applications in households. Smart metering devices substantially increase the amount of available information and data on customer energy consumption as well as production. These developments open up new opportunities for business models which leverage the newly available data. This creates additional value for customers, e.g. by designing algorithms to optimise and automate energy consumption. At the same time questions on customer behaviour and incentives as well as the required regulatory framework of a decentralised smart energy system gain greater importance.

Smart City and Infrastructure

Urbanisation is a global trend: evermore people live in growing cities. But how to keep cities functional and livable against the backdrop of these developments? How to manage the transition in a way that the environmental impact of the city is limited, while demand for transportation and energy grows? Given the complexity of cities, it is central to understand how the city functions today (using urban analytics), how it will progress into the future (business models and value pools) and how it will impact decision-making in companies and municipalities. Energy infrastructures, their implications and the regulatory framework surrounding them need to be carefully examined for becoming an active driver of innovation in the energy landscape.

The EDDIE project creates an outstanding learning opportunity for leaders and all persons involved in the rapidly changing energy sector. With its efforts University of Cologne Business School is actively contributing to EDDIE by developing a Smart Energy Programme for all who would like to become driving forces of the future energy landscape.