In June 2019, the Energy Data Taskforce published its highly-anticipated report on “A Strategy for a Modern Digitalised Energy System”.
Commissioned by government (BEIS), regulators (Ofgem) and industry (Innovate UK), the report advocates a staged approach to modernising the nation’s energy systems, based on the following key principles:
- Data Visibility: to better understand the data that exists, the data that’s missing, which datasets are important, and how to make it easier to access and understand data generally.
- Infrastructure and Asset Visibility: to identify system assets and infrastructure, their location and their capabilities, in order to better inform system planning and management.
- Operational Optimisation: to ensure that operational data can be layered across assets to support system optimisation and facilitate multiple actors to participate at all levels across the system.
- Open Markets: to achieve better price discovery by unlocking new markets, informed by time, location and service-value data.
- Agile Regulation: to empower regulators to adopt a much more agile and risk-reflective approach to the sector by giving them access to more and better data.
The report makes five overarching recommendations to tackle the significant data gaps that currently exist across the system and to maximise data value, as part of an overall effort to digitally transform the industry and drive it towards a net-zero carbon future:
- Digitalisation of the Energy System
- Maximising the Value of Data
- Visibility of Data
- Coordination of Asset Registration
- Visibility of Infrastructure and Assets
In November, Capita hosted a high-level industry event in London to give stakeholders an opportunity to examine the report’s main findings and recommendations. Chaired by industry veteran, John Scott, the main speakers included Laura Sandys, chair of the Taskforce, and Steven Steer, head of data at Ofgem, as well as industry representatives and energy specialists from the world of academia.
Key concerns, key challenges
A number of key challenges were outlined at the event, suggesting perhaps the emergence of a broad industry consensus on the main issues stakeholders need to consider without delay.
The first of these is the industry’s readiness - or otherwise - to get down and dirty on data visibility, transparency and quality. It is clear that significant gaps exist in both the quantity and the calibre of data currently available to distributors, network operators and regulators alike. Some players are broadly on top of the data challenge, while others aren’t at the races yet. However, digitalisation of the industry is coming down the track at pace. It’s not a mere possibility, or an optional extra anymore, it’s happening - and stakeholders need to accept that new reality. In other words, they need to get their data houses in order - and quickly.
Indeed, this finding was reinforced by the RIIO-2 Challenge Group in its report on the energy network companies’ Business Plans for RIIO-2, which was published at the end of January. In short, it concludes that the industry has demonstrated varying levels of ambition and capability with regard to their digitalisation plans. The best performers have clearly set out the aims and scope of their plans within the business, including the costs and benefits associated with these initiatives, and a delivery plan. Furthermore, they have already made concrete progress in terms of implementation and enabling wider access to data. The weaker plans, however, tend to be internally focused, ignoring the wider and external opportunities to add greater value.
Digital transformation of a broadly traditional industrial sector like energy is going to demand a change in organisational culture and attitude too. Stakeholders need to start revising how they think about data, how they treat data and how they store and use data. This has potentially significant implications for OpEx budgets and for workforce development (i.e. recruitment, training, upskilling, etc.) generally.
One silver lining for energy companies finally facing up to their digital deficit is that other industry sectors have been through a similar process already, and much can be learned from their experiences - both good and bad - of peers in telecoms, transport, aviation, logistics, etc.
Another key consideration is interoperability of data between players in the sector and between the sector as a whole and other industries. At our event in November, Ofgem’s Steven Steer was especially vocal on this issue, warning the industry not to develop solutions of its own in isolation from those being developed in other sectors. Those who are focused on developing data resources (e.g. catalogues, registries, etc.) for the energy sector need to be mindful that their new toys must be able to operate and interact seamlessly with other industries and interests.
While the focus of the Taskforce report was very much on what industry players need to do with data to ensure successful digital transformation, the impact on consumers and end users has yet to be considered in any great detail. Personal energy data issues - including privacy (GDPR) and security - are not yet part of the conversation and need to be addressed sooner rather than later.
In November, Ofgem signalled – possibly for the first time – an openness to discussion on that subject that, because our domestic properties are connected to the national infrastructure, meter data should be publicly available to serve as a public good, under the right conditions. As access to such data is very much a critical piece of the overall digitalisation jigsaw, Capita is inclined to support this view.
As one participant at our event pointed out, if the move to digitalisation ends up being too complicated, too confusing or too costly for the end user, the whole initiative risks ending in failure. Consumers are now demanding what might be described as “sophisticated simplicity” from their energy providers. They want to be able to use the latest technologies in their connected homes and smart cars, but they also want it to be as painless as possible. And, of course, they want to be incentivised to do so too, e.g. by benefiting from lower tariffs for more eco-friendly consumption.
Interestingly, many of the issues raised at our November event around data transparency and sharing also feature heavily in the Electric Vehicle (EV) Energy Taskforce report, which was published by the Office for Low Emission Vehicles in mid-January. In particular, the report highlights two key principles that should be applied to EV data management. First, EV drivers should see value in allowing their data to be shared with third parties. Second, they must be assured that their data will be protected. As the EV market continues to expand, drivers are demanding unfettered access to comprehensive charge-point data, including location, availability and speed of charge - the EV Taskforce specifically proposes that charge-point operators make this data readily available.
Mirroring the broad consensus apparent at our own event, a key theme underpinning the work of the EV Taskforce is the need for whole-system thinking, i.e. that the parties developing our EV charging infrastructure should work closely with both the electricity industry and national and local planning authorities. The EV Taskforce supports the recommendations made by the Energy Data Taskforce in this regard and believes their implementation in the EV sector is crucial. As such, industry players - including EV manufacturers - need to cooperate closely to put in place data-acquisition and sharing mechanisms that facilitate efficient planning and operation of the charging infrastructure, to ensure that consumer interests are served and protected.
In many ways, the energy industry today is in a similar position to where telecoms was 25 years ago. Just as the advent of mobile technology changed global telecoms forever in the 1990s, digitalisation is set to change energy in the same way - and data, in all its facets, is going to be a huge part of that transformation.
Capita supports stakeholders across the energy sector with the development of their digitalisation and data strategies. In particular, network owners facing up to the challenge of significant weaknesses in their current data-management skillsets should consider leveraging our extensive data-science experience and expertise until such time as they have plugged their own internal skills gaps.