“Digitalisation is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. It is the process of moving to a digital business.” – The Gartner Glossary
The electricity sector is a huge part of the NZ economy. Its importance to individuals (as an essential service) and the country (as a means to reduce our global carbon emissions) is undeniable. Yet it is poorly served by an unwillingness to improve digital technology in several major areas. Access to essential decision-making data is locked up in a vast array of different systems, and data exchange between those that need the data (both consumers and industry planners) is hampered by poor technology, parochial thinking and ineffective regulation.
Letting this situation continue will stifle innovation, slow the energy transition and cost the country needless millions. Here are some key reasons why this situation is harmful:
1. Inefficient Operations: Without adequate digitalisation, many manual processes and paper-based systems may still be in place. Those that are automated use old technology like comma-separated value (CSV) files shipped around using the secure file transfer protocol (SFTP). This can result in inefficiencies and delays in tasks such as meter readings, billing, customer service, and infrastructure maintenance. Manual or partly automated processes are prone to errors and require more time and resources, leading to increased costs for both the electricity providers and consumers.
2. Limited Data Insights: Digitalisation enables the collection and analysis of vast amounts of data, allowing electricity providers to gain valuable insights into consumption patterns, demand fluctuations, and network performance. Without access to such data, it becomes challenging to make informed decisions about load management, infrastructure investments, and optimising energy distribution. Often this lack of data access is because of poorly designed regulations, incorrect assessment of privacy rules or lack of robust modern, scalable technology. This lack of insights can hinder the sector’s ability to adapt and respond to changing market dynamics and consumer needs.
3. Reduced Grid Resilience: Digital technologies play a crucial role in enhancing the resilience of the electricity grid. Through real-time monitoring, digital systems can quickly detect and respond to faults, outages, or fluctuations in power quality. By contrast, a lack of digitalisation limits the ability to identify issues promptly, resulting in longer downtime during outages and slower restoration times. This can have severe consequences, especially during extreme weather events or emergencies. At the high voltage level, transmission and distribution networks have detailed digital real-time performance visibility; at the low voltage level, it’s a dry and barren information environment where networks find out about faults from customer phone calls.
4. Limited Consumer Engagement: Digitalisation provides consumers with tools and platforms to monitor and manage their energy consumption effectively. With access to real-time data, consumers can make informed choices, adjust their energy usage, and adopt energy-efficient practices. Without these digital tools, consumers are less empowered. They may not have the necessary information to optimise their energy consumption or take advantage of demand response programs, ultimately limiting their ability to contribute to a more sustainable and resilient energy system. It’s not good enough for a retailer to provide customers with the information they want them to see but limit access to potentially more important information like plan or competitor comparisons. Where are all the electricity retailer comparison sites? The one (or two) we do have are hampered by a lack of real-time access to consumer consumption and tariff data.
5. Slower Integration of Renewable Energy: New Zealand has been actively transitioning toward renewable energy sources such as wind, solar, and geothermal power. Digitalisation plays a vital role in integrating and managing these distributed energy resources efficiently. Without robust digital infrastructure, balancing supply and demand, managing intermittent renewable sources, and implementing advanced grid functionalities like smart grids become more challenging. This can hinder the seamless integration of renewable energy into the electricity system and slow down achieving sustainability targets.
Overall, the lack of digitalisation in the New Zealand electricity sector poses significant challenges to its operational efficiency, grid resilience, customer engagement, and renewable energy integration. Embracing digital technologies can unlock numerous benefits, enabling the sector to become more agile, data-driven, customer-centric, and sustainable in the face of evolving energy needs and technological advancements.
Doing something about it: Cortexo is part of the cross-industry group the FlexForum, which has a mandate from its members to “learn by doing”. FlexForum has identified digitalisation as a key enabler of our new energy future. We look forward to establishing a working group to provide least regrets steps to digitalise our sector from top to bottom.