Utilities going digital? Utilities looking like tech companies? WHOA! Thank goodness crazy talk like that is not going on here in the good old stagnant USA, but rather in stodgy old Europe. This thinking of being innovative and way ahead of the curve is not usually linked to the utility sector (and even then, dangerous to CEOs who think like that) BUT change is-a-coming. The utility sector is adapting by developing software to better manage power lines, installing thousands of vehicle charging stations (hmmm, will a self driving car be able to plug itself in??), link thermostats/appliances/etc to smartphones and install smart meters. And, of course, use digital wallets to pay your bills on a timely basis. Suffice to say there are a lot more applications and just providing fuel and energy are so last year. Utilities becoming tech firms? YEAH! Utilitech? (just made that up…..copyright pending)
(Bill Taylor/Managing Editor)
“In December, 20 months into the top job at Germany’s Innogy AG, Peter Terium unveiled a 3 billion-euro plan to transform the utility into a provider of electric car technology, digital networks, and offshore wind farms. His goal, he said, was to become “a trailblazer of change. We do not wait to see what happens. We set trends.” Terium didn’t need to wait long to see what happened. A week later, he was out of a job.
Terium’s fate highlights the dilemma faced by European utilities. The likes of the U.K.’s Centrica Plc, Eon SE of Germany, and Italy’s Enel SpA are shifting away from their traditional business of simply selling electricity and starting to offer higher-tech—and potentially more profitable, but also riskier—services such as smart meters, rooftop solar panels, and installing batteries in customers’ garages.
Utilities, grid operators and other companies in the sector will plow $590 billion into digital initiatives from 2017 to 2025, or about a fifth what they’ll spend on of their total capital spending, according to Bloomberg New Energy Finance. The industry must make such investments if it’s going to survive, but “you need to credibly show that you can deliver,” said Leonard Birnbaum, an executive board member at Eon. “You can’t say, ‘Hey there’s the growth out there, let’s go spend money. Trust me and lets see what happens.”…”