How software innovation will power future energy platforms

In the face of supply uncertainty, increasingly urgent environmental goals and surging price rises, the energy industry finds itself under immense pressure to innovate. At the same time, the competition to attract and retain customers is intensifying, with consumers also looking for an effective digital experience, alongside transparent consumption data and control.

Given these opportunities and challenges, how can the energy industry find fresh and innovative approaches to deliver what each stakeholder wants?

Looking at IT infrastructure, for instance, one increasingly important innovation avenue comes in the form of APIs (Application Programming Interfaces). These are pieces of software that provide developers with a set of functions and procedures whereby one application is able to access the data and features of other applications, services, or operating systems of another.


Essentially, they act as a go-between for different software platforms, allowing two unrelated applications to "talk" to each other. In the context of the energy industry, APIs have huge potential to speed up the development of digital energy projects and elevate energy from a simple utility to a real force for positive transformation.

This includes an array of possibilities, such as developing data-driven business processes, standards for use across departments, or service models that add value for partners and customers. Implemented together, APIs and digital transformation offer the opportunity to build an entirely new business model across a large and untapped market.

Energy in flux

But why now? Historically, energy production has generally been a state monopoly business in the post-World War II era, however it has recently undergone some degree of privatization. As new technologies (such solar panels and wind turbines) arrived to boost generation options across the energy sector, it has also became possible for individuals to generate their own electrical energy, contributing to the decentralization of production.

In recent decades, the power to govern how energy is distributed has also diminished as the production monopoly lost its significance, opening the door for a brand-new kind of energy platform. But, while the widespread use of clean and renewable energy sources is a work in progress, these solutions cannot currently meet demand, which may require a bigger focus on energy storage.

For instance, given their capacity for energy storage, electric vehicles (EVs) might soon play a significant role in the management of electrical networks. Think of it this way: EVs typically use less than 80 percent of its battery capacity for everyday travel and sit idle for around 95 percent of their lifetime.

Therefore, at times of high demand, it should be possible to shift the electricity stored in an electric car to the energy grid, especially if EV owners are able to charge their car battery at off-peak times. This "vehicle-to-grid" or V2G concept, hints at the beginnings of a multi-connected energy network in both the technical and commercial senses.

But, to enable production and consumption tools to exchange data without the need for human intervention, this kind of platform would need to be sufficiently open and standardized -- a requirement that instantly leads to APIs. What’s more, the platform must make it possible for each individual EV user to buy electricity for their electric vehicle wherever they are, without the need for a new subscription, as is already the case on European highways.

Of course, a key concern of implementing this architecture is making sure the platform is secure. What would happen, for example, if services were hacked, allowing ransomware to infect electric vehicles? Hackers might then gain access to data on charging and demand money from consumers to recharge their vehicles.

As a result, it will be crucial to centralize the industry value chain and secure distributed energy. To achieve this, any energy organization building APIs will also need to find a partner to fill the operational gap so that they can rapidly and securely put these APIs into production. At the same time, applying a defense-in-depth strategy will safeguard each API, regardless of their development or deployment status.

For legacy energy organizations, many of whom are witnessing their monopolies disappear, the opportunity to innovate has perhaps rarely been more pressing. By moving to an open platform ecosystem, they are ideally placed to address both their own needs and those of their consumers, while at the same time having the advantage of long standing brand equity and an existing customer base.

In an era where politicians, regulators, campaign groups and consumers are putting the energy sector under greater scrutiny than ever before, those organizations that embrace innovation in all its forms will be strongly placed to succeed over the long term.

Image credit: zhangyang13576997233 / Shutterstock

Emmanuel Méthivier is Business Program Director at Axway.

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