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The Digital Utilities Inspire and Shape a digital world that reinvents power generation, transmission, distribution, and retail
Dear Customers and Partners,
Ten billion people – that’s the global population projected by 2050. Some experts say the demand for electricity, natural gas, and water will double or triple as billions of people join the digital economy, and the use of energy and water will grow while vehicles and mass transit go electric. One thing is clear – the digital economy needs clean, dependable, and affordable electricity.
This should be a great outlook for power generators, distributors, and retailers, but decarbonization, deregulation, and decentralization are disrupting the century-old utilities hierarchy. We see a “Digital Energy Network” emerging that reflects new structures of power generation, transmission, distribution, and retail. It will foster new business models and processes and transform work in a competitive and collaborative digital economy.
The consequences are dramatic. Proven utilities business models based on trillions of dollars worth of plants and grids collapse. New market entrants, such as Google and Tesla, disrupt the value chain. Rapid technical and social innovation puts new capital investments at risk. Consumers, communities, and companies go “off the grid” with new wind, solar, and storage technology.
The industry is currently balancing the efficient operations of its existing infrastructure with the need to adapt to the volatile market environment. Leading utilities are re-evaluating their physical assets and customer relationships to:
• Reimagine business models to find new revenue and profit sources by offering innovative supply, load balancing, and smart home/business energy services
• Reimagine business processes and use digital technology to optimize business outcomes by converging information and operational technologies
• Reimagine the role and structure of the workforce to support future business by incorporating wearable technology, 3D printers, and geospatial technologies
“Reimagining” the utilities business will shape the Digital Energy Network that overlays and complements the power supply system. All participants – utilities, consumers, and new nonutility players – will use digital innovation to anticipate real-time demand and supply, operate selfhealing grids, and innovate the customer experience.
Our vision is to help the world use energy and natural resources responsibly today and tomorrow while providing reliable, sustainable, and affordable energy for all people. This requires access to the Digital Energy Network for all participants. We will offer the digital foundation and the digital gateways that integrate the core solutions of each market participant to the Digital Energy Network.
This document offers our perspective on where the industry will go and how SAP contributes to the evolution of the Digital Energy Network. Thank you for your interest, and I look forward to our journey together.
Henry Bailey Global Vice President
Utilities Business Solutions SAP
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