The power industry faces a complex set of challenges: extending electricity access to over one billion people around the world who are currently in the dark, and providing sufficient power to support stable growth and rising living standards for billions more; ensuring environmental sustainability and decarbonization across fossil fuels and renewables; improving efficiency across an increasingly multi-dimensional energy value chain.
At the same time, the convergence of digital and physical innovations, together with advances in energy technologies, has begun to impact the industry. These advances help open the way for bi-directional energy flows in the grid, for real-time demand adjustment, for a smarter combination of energy supply sources and to deliver higher electricity output from existing assets, as well as enhanced performance from future infrastructure investment.
These trends pose a new set of challenges to the industry: balancing the fuel mix, ensuring the reliability of power delivery and quality, improving asset level visibility, identifying new revenue sources, integrating new technologies, neutralizing cyber security threats and coping with an aging workforce.
The future of the power sector is a new value chain augmented and interconnected by digital technologies one where both power and information flow in multiple directions; all actors add value; and the overall efficiency, cost-effectiveness, resilience, and sustainability of the system are enhanced by information sharing, openness, collaboration, and coordination between stakeholders through the right set of incentives.
Energy providers will join a new breed of digital-industrial companies. This will require changing their business models to take full advantage of new digital capabilities.