Powering up the transition to a new energy world - E.ON, AI and digitalisation
- "The progress of mankind has been pretty much inextricably linked to energy" - E.ON Digital CEO Matthew Timms on the challenge and responsibility facing the organisation in a world of climate crisis.
There’s a bold statement of intent on the homepage of the E.ON corporate website:
We are going to be the energy company that supplies energy for the digital age.
In pursuit of that ambition, the energy giant has embarked on a number of digital transformation initiatives in recent years, both internally to transform the way it operates and externally to assist client organizations and consumers to transition to what it pitches as a new energy world.
At the heart of all this is a dedication to using data as the foundation for change as Matthew Timms, CEO Energy at E.ON Digital, outlined as part of a keynote address during London Tech Week recently:
We're putting AI, we're putting digitalization, at the heart of everything we do in our business. The reason that we're doing that is that we've got to make a significant impact on supporting us through this challenge that we have around climate. We're seeing that the climate is significantly impacted. We're seeing temperatures increasing. We're seeing the impact that that has on the weather. Therefore we really need to ensure that we're able to take society and government through this transition and support us through that. Putting AI, putting data, at the heart of what we're doing allows us to really explain that, to visualise that and bring that to life for people so that energy does become very meaningful. That's something that we believe will help us drive this change as we move forward.
That visualisation concept is critical, he argued, as users typically take energy pretty much for granted without a real understanding of key factors:
We're just not engaged enough with energy. We take it for granted. The lights are on, my computer's working, I'm able to watch the television, I can drive from A to B - all of these things are just there. We only miss energy when the lights go off.
Few people - including many in the energy sector - know what can be done with one kilowatt of energy, he suggested. (Make 200 margaritas was one thing, he added!). That needs to change:
If you look at how we start to build this level of engagement with customers, data is really the starting point and data allows us really to actually visualise how people are using energy, so that it isn't something that we take for granted, so that we can understand how the energy that we're using relates to carbon dioxide and how much we're putting back into the atmosphere and therefore how much impact that we're having on the environment. It's only through that engagement with consumers that we are able to actually bring this really to life. So for us, data is really the starting point of engaging with energy.
Keeping the lights on
From E.ON’s perspective, one of its main roles is to being together energy networks, said Timms, being able to deliver energy to homes and workplaces where, when and in what form it’s needed. That’s the basic ‘day job’. But there’s more on the to do list today:
On top of that, what we're doing is building a very sustainable portfolio of products and customer solutions that enables us to really drive sustainability at the heart of everything that we're doing, even where we're doing energy sales. For example in the UK, we've moved to entirely green energy. That also supports us in terms of ensuring that our customers are able to feel that they don't have to make a decision about that energy choice. We’re able to deliver green energy to them straightaway.
E.ON is also looking at building solutions for customers to be able to produce and manage their own energy. That's really around the future energy home, where we're looking at delivering solar panels to our customers, we're looking at delivering batteries to the customer, so the customer can actually produce their own energy, store their own energy, but also look to provide energy back into the grid at times of high demand so that we can also look to create flexibility and balance the grids as needed. Of course we're working with cities. We're working with larger customers as well to be able to deliver the type of infrastructure and energy services that they need.
And then finally, we're really investing significantly into the future of mobility - electric cars, putting charging points on the grid at the right points to allow people to be able to charge their cars, to be able to travel , in a way that allows them to do that in a very sustainable and in a very green way, where we don't have such a significant amount of carbon dioxide being put into the atmosphere.
In support of all this, E.ON has structured itself in such a way that digitalization and data are seen as part of the corporate DNA:
The starting point of that is really around building leadership capabilities and a digital culture that allows the organisation to drive digitalization at a different level. Sitting on top of that we have something we call Process Automation. This is probably the simplest application of data and digitization into the business, which is around improving and automating the processes that run your business. On top of that sits customer and employee experience. When we look at how customers are engaging with us, we're seeing a much greater shift, particularly with COVID, to digital channels. As an organisation, we had to shift entirely to deliver and maintain the energy infrastructure in a remote working environment. That's also powered by technology and was part of our digitalization activities that we had underway.
The next part of our of our business digitalization and transformation is looking at how we can take an existing business and using technology, using data models, rebuild that business, so that it's far more agile, quicker to market, has a lower cost to serve. That's really about re-designing our existing technology. At the top of the pyramid [is] something we describe as new businesses. In terms of digitalization, [this is] looking at how we can apply technology to deliver new services to our customers that we may not have considered in the past. These would be things like looking at how they're applying data and AI to support our customers. It could be applying software into our customers businesses to support them operating in a sustainable way and allow them to actually manage their energy in a different way. That's an entirely new business for us. It's a software-based business, it's a recurring revenue business, but it really brings together everything as part of our transformation.
He added that it’s crucial to build out an organizational culture that is supportive of the wider goals:
We need to have an environment that attracts people into our organisation. We need to create a culture that values putting the customer at the heart of what we're doing. One of the things that we found incredibly powerful is that because we're driving a new energy world, because we're aligning our mission as a business to support one of the world's most intractable problems which is climate change, it's actually a very appealing place to work. You're actually doing something very meaningful if you're wanting to actually apply your skills into making the planet a better place.
This is one of the things that we've been building over time to actually bring the people in. We're also ensuring that we're up-skilling our existing organisation to understand how you can actually really drive and base your business decisions on data, how we can build data models into the heart of how we're operating, ensuring that all of the data that we're able to get from customers we are able to apply into things like being able to buy energy in a more efficient way, and really ensure that the whole organisation is aligned behind thinking about how we actually come up with use cases and apply this into our business.
As for those use cases, Timms cited the example of pulling together traffic flow data in Germany to identify hotspots of demand where consumers will have a need for charging points for electric vehicles:
This allows us in two ways to bring data and apply data into our business. So, the first one being, clearly we can we can approach and we can work with customers to find the best locations to put e-mobility charging stations. The second thing that we can use this data for is to actually really understand how as you scale up e-mobility, as you have an increasing number of electric cars moving around cities, what will be the impact of those cars on the grid? Clearly, for us, being able to maintain a consistent energy supply is incredibly important and charging electric cars takes a significant amount of energy from the grid.
Algorithms and analytics are also being applied to monitoring and predicting energy consumption, he added, pointing to the exemplar of a village in Sweden as a case in point:
We are actually working with that town to make it entirely free from the grid by providing solar, by providing wind [tech], to enable the community to be able to create their own energy, but importantly to be able to ensure that we're able to locally balance the energy demands for that small village...bringing together the data from generation, the solar panels that are available, the wind generation that's coming, and forecasting ahead with the demand that we're seeing from the customers in that particular location to ensure that we're able to deliver this consistency of supply of energy to the customers,
Meanwhile internally AI is being used to optimize E.ON’s own maintenance and repair activities to ensure that the proverbial lights stay on:
What we've been able to do here, using algorithms, looking at the assets or the parts of the grid, the substations, the cables, the age of the cables and everything else, is to actually combine all that [data], apply algorithms to be able to then not only identify when and how we should be maintaining the grid in an efficient way, but also to predict ahead and spot potential faults on our networks.
But it’s the wider mission statement that stands as the most challenging - and for Timms, E.ON and other organisations like it have a pivotal role to play:
One of the things that we've seen in the energy world is that generally the progress of mankind has been pretty much inextricably linked to energy…each point or change that we see, energy is a contributing factor to that. It is a contributing factor in terms of the carbon dioxide that's gone into the atmosphere, but it's also a contributing factor in terms of lifting society up. One of the things that we see as incredibly important now is the ability for us to be able to now apply energy technology with our customers to support us making the planet a better place.