How to face the challenges of digitalisation in Europe’s energy sector

According to a recent report published by the Global e-Sustainability Initiative (GeSI), by 2030, digital technologies could help resource-intensive industries reduce their global Co2 emissions by 20% - saving 9.7 times more emissions than they produce.

However, while other resource-intensive sectors are leading the way with digitalisation, the energy sector is still somewhat lagging behind.  

A new report published by Enlit reveals that 47% of energy professionals believe that 2030 targets will be missed by 5 years or more, with root-causes being directly linked to incomplete digitalisation programmes and lack of digital transformation.

Let’s take a closer look at the challenges of digitalisation in Europe’s energy sector:

Dependency on legacy systems

Many traditional energy companies still use legacy systems that are unable to keep up with the demands of the ever-evolving sector. Upgrading to modern energy management systems is crucial.

Older SAP-based platforms lack the capabilities to leverage emerging technologies like Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning - all of which are essential to digitalisation. Likewise, many legacy systems are unable to monitor energy consumption automatically or integrate with new non-commodity products like solar panels.

For this reason, energy companies can’t delay upgrading their management systems. They need to embrace modern, agile and flexible platforms that can respond to market changes quickly and provide the level of customer experience that consumers expect today. Smart grid technology will play an increasingly important role.

The future lies in cloud-based billing and CRM systems that are custom-built to evolve with the energy market. For example, a large German energy company, Enercity, replaced their SAP legacy with triPica SaaS agile platform to build a completely new digital sales and customer service experience. By embracing a very innovative platform, enercity made major reduction of their cost-to-acquire, while seeing reductions in their churn-rate as well as their cost-to-serve.

A lack of digital skills

A recent report published by the European Investment Bank found that 80% of companies and 60% of local authorities believe that the engineering and digital skills shortage is preventing climate change projects from progressing.  

For utility companies to progress on their digital journeys, they need to invest in talent as well as technology. In a competitive job market, companies must have robust recruitment strategies in place to attract top candidates with digital skills.  

They also need to invest in training and upskilling so that existing employees have the resources they need to use the technologies that are being acquired.

Of course, this is a costly undertaking, and the return on investment from upskilling can take time. However, it is imperative that companies continue to invest in technology and talent to keep up with consumer and market demands.  

A quicker way of gaining a return on tech investments is to outsource certain skills and adopt a software-as-a-service (SaaS) approach. For example, Yenka, a French energy B2B retailer migrated from two legacy systems to a fully optimised energy delivery model hosted on a single platform with the help of triPica. Yenka migrated its operations and data from its legacy systems in record time using our SaaS platform and the expertise of triPica team, while decreasing their IT spending costs.

The need for cybersecurity

As consumers continue to use smart, connected energy devices, the risk of cyber-attacks will increase. Cybersecurity in the energy sector is a growing concern. In the last year alone, Europe’s energy sector has been the target of numerous cyber-attacks.  

For example, in February 2022, the Amsterdam-Rotterdam-Antwerp (ARA) oil refining hubs were attacked, affecting loading operations across 17 terminals.

Indeed, the energy sector is more aware of cyber threats than ever before. According to a recent survey by risk management company DNV, 77% of energy executives said cybersecurity has become a higher priority than it was two years ago. What’s more, 46% of respondents said their company is complacent about cybersecurity.

For utility providers to digitalise successfully, cyber security needs to be a top priority. Companies need to analyse where they’re most vulnerable to attacks, allocate budgets to protect themselves and their customers, and balance their investments between technology and training.

Coordinating digital strategies across supply chains

Having access to technology and talent is one thing, but being able to coordinate efforts with stakeholders and supply chains is another.  

Accenture reports that economic losses due to recent supply chain disruptions in Europe are estimated at €112.7 billion, demonstrating just how much of the sector is reliant on third-party cooperation.

Supply chains can be challenging to coordinate under normal circumstances, let alone when trying to transition to a digital-first approach. Collaboration is therefore key to ensuring that priorities align.  

All organisations in the supply chain need to be able to share data to enable a holistic overview of power demand, availability, and storage capacities. Data-driven dashboards like those we provide at triPica are essential to ensuring that supply chains are connected, automated, and optimized for digital success.

Negotiating regulatory and market changes

The regulatory landscape in Europe is becoming increasingly complex with different regulators setting the rules for different EU member states. Electricity market deregulation has added further complexity.

In Germany, for example, the electricity regulator is Energy Industry Act (EnWG), in France the public electricity network is operated by Enedis, and in Spain, the electricity regulator is the Comisión Nacional de Energía (CNMC).  

Companies therefore need to be able adapt quickly to be able to meet evolving digital regulatory requirements.  

Likewise, whereas large energy companies have traditionally controlled the European energy market (and the cost of energy), they’re facing increasing competition from smaller, agile companies that are able to innovate quickly and corner niche areas of the market. The rise of decentralized energy systems is disrupting traditional business models.

Traditional energy companies need to be able to negotiate their positioning amongst smaller digital-first companies that are leveraging disruptive business models.

Before large companies can embrace digitalisation, they need to plan how they’ll use technology to drive customer experience and keep up with new business models.  

How triPica can help energy companies accelerate their digitalisation efforts

Despite the success of early adopters like Enercity, the European energy sector is still lagging in its digitalisation efforts. The truth is many companies simply don’t know where to being in their journeys. They know they have targets to meet, but they’re unsure how to fully implement a transition beyond making use of few digital tools.  

Much of the transition to digital means stepping away from the ways things have always been done and opening doors to new business models and processes.

At triPica, we help utility companies fast track their digital transformation. We’ve launched disruptive energy and utility offers in France and Germany in less than 4 months. We’ve also developed a solid, scalable architecture with flexible blueprints that allows for quick launches.

We operate a mono-tenant SaaS business support system (BSS) built on standards set by the telecom industry. This enables us to customise our service to meet the specific needs of energy companies.  

We provide a suite of configurable tools like Price Editor, Notification Editor and Business Process Modelling and Notation (BPMN), as well as a native mobile app that enhances the customer experience.

With our platform, energy, gas and water service retailers can launch a fully digital customer experience using the most disruptive, flexible technologies on the market and stay competitive, now and in the future.

Find out more about how triPica can help your company accelerate its digitalisation efforts and impress your customers with flexible competitive energy offers and experience they will love - all in just a few months.

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