Dr. Strangelove – Or how I learnt to stop worrying and learnt to love the BlackOut

First you have to read the book or listen to Marc Elsberg to get excited about Utility and BlackOut!

Learn more about regulators and energy market liberalisation!

ENBW describes it very well: https://www.enbw.com/energie-entdecken/energiewirtschaft-und-politik/politik/liberalisierung/geschichte.html

The ENBW page translated by http://translate.google.com:

Until 1998, the world of German energy suppliers was completely different than it is today: every company had its own defined supply area, nothing could happen in a monopoly. Customers could only obtain energy from this one provider. At best, there was competition in the heating market, where natural gas had to assert itself against oil. When the Federal Minister of Economics at the time, Günter Rexrodt, heralded the “liberalization” of the energy industry and thus implemented European resolutions, most managers believed that this was simply not feasible. There it was said: “Lead other people’s electricity through your own networks? That is not possible! And how are you supposed to account for that? Who would want that too? Nobody asked for it! ”But it all happened pretty quickly: The large industrial and trading companies were the first to recognize that they could now choose between several electricity suppliers. So they obtained offers, put their traditional supplier under pressure or switched to another location straight away. Liberalization was also possible technically and in terms of accounting, as the telecommunications market had shown a few years earlier. At that time, a major concern gripped the industry: What if not just a few large customers, but the many household customers, would also take advantage of the new freedom? So they prepared for the new situation, developed energy brands, services, and services, and began soliciting customers. The first energy brand to hit the newly liberalized market in 1999 was Yello Strom. It neither has its own network nor does it generate electricity itself. The nationwide sales company was founded by EnBW and is still part of the company today. The gas market has also been liberalized since 2007. The basis for this was created in 1998. However, it took a few more years for free competition to get underway. At the beginning of liberalization, relatively few private customers actually switched to other suppliers. Quotas between two and four percent were tolerable. But over time there were more, especially when numerous comparison portals on the Internet made the switch easier – and politicians and consumer associations also encouraged it. According to the BDEW, around 44 percent of all households in Germany have changed their electricity provider since the beginning of liberalisation, around 35 percent for natural gas (as of 2019).

The liberalisation brought a lot of advantages for the consumer, however utility industry is disrupting itself due to a leap-frogging whole sale price for gas and electricity. https://www.derstandard.at/story/2000132081089/strompreis-schnellte-an-der-boerse-kurz-ueber-marke-von-600

Understand Digitisation in the Utility industry!

What I have learnt recently, for all the utility eco-system it is easier to build CAPEX infrastructure instead accepting increasing OPEX caused by digital pressure. For experts only: You can find the details https://www.e-control.at/marktteilnehmer/strom/netzentgelte/entgeltermittlungsverfahren here. Distribution system operators got an exception for a smart meter roll-out, however the real challenges caused by Decarbonisation, Photovoltaic and Wind Farms are not addressed so far that digital new innovation can be adopted very fast. The normal answer is rather more expensive investments into physical assets than into digital assets powered by artificial intelligence. Fore example in Austria https://www.diepresse.com/6070919/apg-steckt-35-milliarden-euro-in-netzausbau-bis-2032 the TSO APG invests 3,5b EUR until 2032 in the transport system.

So Regulators should overthink their decade old liberalisation regulations and:

Don’t ask what Artificial Intelligence can DO for you, ask what you can do for Artificial INTELLIGENCE!

As TSO you can find different digital levers to address the challenges ahead of the utility industry with like the Control of the Future presented by Tennet.

If you consider* investing into this area:

  1. There is an enormous total addressable market!
  2. There are unserved needs!
  3. There is an easy value proposition!
  4. Digitisation and Artificial Intelligence provides viable feature sets!
  5. Solve the user experience for the manifold personas from Transport System Operators, Distribution System Operators and Regional System Operators & Regulators!

*Investing refers to brain, time and money 🙂