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DIGITAL TRANSFORMATION Inspire and shape a digital world that reinvents power generation, distribution and retail. The consumption of electricity will, in the next decades, nearly double as the world population approaches 10 billion people, the middle class adopts new electronic devices in emerging economies, urbanization accelerates at an incredible pace and transportation goes electric. This sounds like great news for the power generators, distributors and retailers, but deregulation, decarbonization and decentralization are destroying the century-old hierarchy of centralized power generation, transmission, distribution and retail. The consequences for the utilities industry are dramatic. Proven business models and business plans based on enormous capital investments in plants and grids collapse. New market entrants such as Google and Tesla disrupt the value chain. Mass ‘prosumers’ collect solar energy on their roofs and store it in their basement or in electric vehicles for later consumption. Communities and companies go ‘off the grid’ with private wind parks or solar farms. Big change always comes with big risk, but also offers opportunity for innovators. After all, the digital economy needs affordable, reliable and sustainable electric energy for smart appliances, clean and connected mobility, digital communication and distributed manufacturing. Currently the utilities industry is facing the challenge of operating the existing infrastructure cost effectively under the changing paradigms. Leading utilities are re-evaluating their physical assets and customer relationships to: 46 VALUE CREATION IN THE DIGITAL ENERGY NETWORK Re-imagine business models to find new revenue and profit sources. Re-imagine business processes and use digital technology to optimize business outcomes by converging information and operational technologies. Re-imagine the role and structure of the workforce to support future business by incorporating wearable technology, 3D printers, and geospatial technologies. This ‘re-imagination’ of the utilities business requires a digital energy network that overlays and complements the power supply system. All participants – utilities, consumers and new non-utility players will use digital innovation to anticipate real-time demand and supply, automatically control energy generation and storage, operate self-healing grids and innovate customer experience. This continuously optimizes the business outcomes for innovative and adaptive participants in the digital energy network. Our vision is to help the world use energy and natural resources responsibly for today and tomorrow by providing reliable, sustainable and affordable energy for all people. We will provide the digital foundation and the digital gateways that integrates the digital core solutions of each market participant to the digital energy network, links to cloud-based customer engagement services, integrates business networks, taps into the extended workforce and bridges to advanced operational systems that use new technologies Big picture: Digital economy is real and it will continue to transform business The digital economy Five technology trends are shaping the digital economy – hyper-connectivity with consumers, supercomputing, cloud computing, cyber-security and a smarter world focused on outcomes. Leading utilities are preparing to use these technologies to find new answers: Where are profitable business models based on new technologies and trends like solar energy, smart home devices, flexibility services and data science? How to capitalize on the demand for reliable and sustainable power in a hyper-connected world? Which trends and technologies from adjacent industries are influencing the utilities market (e.g. consumer electronics and smart home devices)? Leaders are emerging quickly from nowhere The utilities industry boundaries are already blurred. Large players like Google, Samsung, or Tesla and millions of private consumers engage in sustainable and smart energy generation and management. Start-ups promise sustainable and reliable power supply at reasonable costs. Key questions include: How to sustain and grow customer relationships with new digital services? Which market spaces are the most attractive for new disruptive competitors? Who are potential partners in the digital energy network? Early adopters are winning Research shows that companies who embrace the digital world and execute on their digital strategy are growing shareholder and stakeholder value faster than their peers. The nature of the digital energy network forces participants to synchronize and collaborate to deliver stable, affordable, METERING INTERNATIONAL ISSUE – 4 | 2015