Blockchain Technology – a Threat to Distribution Network Operators? 

Are distribution network operators in Europe threatened by a potential application of blockchain technology in the energy sector? This seems to be the pressing question that was at least partially the motivation for a recent report on blockchain in the energy sector by eurelectric, which is the European association of the distribution grid operators. From our perspective, this report reads like an attempt by the industry to reassure itself that its core business model – asset ownership and operation of the electricity networks – is not threatened by blockchain. While this might be true for asset ownership, this is different in the case of network operation.

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Digital Transformation of Energy Utilities – Shifting Gears?  

Utilities’ investment in digitalization is increasing but still follows an asset-based approach. Investment in software, however, seems to be lagging behind with no increase in budget over the last three years. With respect to new software solutions, like AI, the energy sector currently comes in last compared to other sectors and will do so in the future according to the survey by BCG quoted in this post. Nevertheless, there are currently many solutions based on AI, machine learning or other digital approaches available to the utilities. Which leaves us with the question whether utilities will pick up the challenge to adopt these new technologies like AI and apply them to their core-business?

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6 principles for a market design that enables the energy transition

The current market design in the energy sector is challenged by decentralization and digitalization. In this post we discuss six economic principles that provide a framework for an efficient market design that is capable of facilitating the energy transition towards renewables and digital services. Among others we discuss the requirement that the market design needs to become more flexible to adapt to local market failures and to an increasing speed of innovation driven by digitalization. 

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German Utilities struggle with digitalization – especially the retail sector

Utilities in Germany and around the globe strive to become service-based energy providers to address the challenges arising from decentralization and digitalization. In this post we discuss two recent surveys that show two things: Utilities are struggling to enter the smart home market and their adaption of existing digital solutions is very slow. Especially the retail sector does not apply many digital solutions, even though retail is at the heart of a service-based utility. One response to these shortcomings by some utilities are digital attackers that are launched now in Germany to digitize retail business. Is this the right strategy?

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The Future of DSOs: Digital Platform Provider vs. pure Asset Ownership

With digitalization and increasing shares of renewables on the distribution grid level the question is raised whether the distribution network operator should be assigned with the task to facilitate regional market platforms for digital and physical transactions on a regional scale. We discuss concepts from New York and California and their potential implications for regulation of the network operators in the US and Europe. 

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Digitalization in the Energy Sector – Challenge accepted?

Utilities are at a crossroad: They can follow their established paths and focus on their traditional long-term business models. Or they face the challenges of digitalization and adapt to the faster innovation cycles related to digital business models. We discuss the utilities' strategies related to digitization and find arguments that support both scenarios. Which way are the utilities going to take? Let's see. 

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