The energy industry is undergoing massive change, with the decarbonization of energy being one of the biggest challenges of our time. The future of energy generation, trading, supply, and consumption will look totally different in 15 to 20 years, and the journey has begun. Renewable energy sources — including solar, wind and other sources such as green hydrogen — are on the rise and will be key drivers of sustainable energy systems and environmental, social and governance (ESG) programs. 

The energy networks of the future will be different. They will be digital, much smarter, and more resilient and must be made safer against cyberattacks and other threats. We will see new industries developed through renewable energy services, local energy markets, and integrated cross-industry business models between energy suppliers, automotive, retail and financial companies. Businesses and consumers will develop new attitudes about consuming energy and play a role in ensuring sustainability of the environment. Larger businesses will step into the renewables business and become energy suppliers in local energy markets while connected to digital energy networks and operational assets.  

This transformation will need new IT infrastructures in cloud and hybrid environments, massive use of intelligent digital services and adaptable customer relationship management (CRM) technologies.

Khaled Popal, partner and practice leader for Energy and Utilities in DXC Technology’s EMEA region, shares some insights on how advanced smart technologies and digital IT services will be help future market players light the path to a green future.  

Q: What are the energy industry’s top three challenges in transitioning to renewables?

Popal: The energy industry is playing the central role in transforming energy-generation systems into a renewable future. It’s a big challenge that we face, but we must succeed. The industry must deal with transitioning businesses and households to the future of energy systems while staying competitive. This will require huge changes in launching new business models and differentiated energy solutions and services that can be highly customized and personalized for consumers.  

Businesses and households will transition into decentralized local energy generation, supply and consumption, but today’s energy networks are not really fit for this purpose holistically. Future networks must cope with any type of energy generation and transmission and ensure the constant supply of energy as needed. In the future, energy networks will have to be digital, smart, resilient and safe, requiring massive investments in green IT and digital technologies.

Last but not least, energy companies need to shift to global integrated co-creation ecosystems to shape the transition and transformation of future energy systems. Big problems can be solved together through co-creation.

Q: How can traditional utilities stay competitive with new entrants in the market?

Popal: Many traditional utilities have started to explore and introduce innovative business models to stay relevant in the development of future energy systems. While every utility company wants to play a role in the transition of energy systems, differentiation will come from being able to quickly adapt consumers to future energy systems. The telecommunications and automotive industries have successfully adapted to future consumer demands, and they have introduced new business models that are massively focused around “making more of data” in their core business services. Utility companies can play a key role in shaping the future of mobility beyond e-mobility, stepping into cross-industry business engagements with retailers, telecom, automotive and electronic manufacturers to shape a new industry out of renewables.

Changing consumer experiences is the key opportunity to offer differentiated services by letting consumers become prosumers — i.e., consumers who are also producers — as well as becoming traders and smart citizens. Many countries have rolled out smart meters. Consumers are becoming smart citizens in their households, but not every citizen understands the power of personalized and customizable energy consumption in their lives. This is why energy and utility companies must focus on innovation, research and new differentiated business models. We must make it easier for prosumers to produce and sell their own energy in local energy markets. We must partner with other sectors to get more ESG-rated appliances, televisions, computing resources and vehicles in the hands of consumers and businesses to control energy demand and costs. Business processes between suppliers and consumers must become more digital, which will allow suppliers to monetize their data. This will enable energy firms to offer more attractive incentives for renewables and add-on services — thus creating more value.

Q: Why is it important for utilities to move from traditional data center environments to the cloud? What is the right mix of IT infrastructure?

Popal: Energy companies have large landscapes of complex, rigid IT backbones that require huge investments of capital and time for application modernization. In many countries, regulations actually hinder modernization. Adding to this complexity are diverse portfolios of both centralized and decentralized business applications. The right use of cloud and digital technologies is a key enabler for the transition and transformation into future energy systems. Enormous investments are needed to make current IT fit for the future of energy. Imagine a future in which every asset of corporate and energy systems is on cloud. To achieve this, complex business processes, application landscapes and IT infrastructures need to be analyzed and differentiated with a focus on introducing sustainable and green IT. Business processes must be made lean through software as a service (SaaS) and enable the workforce to easily access digital technologies.  

We know that today “one size does not fit all.” You cannot migrate every piece of business to the cloud, due to security restrictions, regulations, data privacy and more. However, IT infrastructures must be flexible enough to quickly modernize business processes and applications in the cloud. This will continuously decrease the costs of new service development while increasing the efficiency of business operations — a key driver for differentiation in energy business. Energy companies must be able to quickly launch new business offerings to consumers, keep the cost of use as low as possible and effectively identify new opportunities for offering and selling to consumers. This will need a massively modern IT infrastructure and totally different approaches for IT modernization.

At DXC Technology, we call this optimization of cloud and on-premises infrastructure the Cloud Right™ approach — making the right technology investments at the right time on the right platforms. Once your business applications are “cloudified” or on SaaS, you will have easier access to smart technologies, your assets will be connected to each other, your business operations will be much more efficient, and your people will be able to access digital technologies faster. 

Q: What are the benefits of having an open platform for the development of new energy solutions?

Popal: An open platform enables a platform-enabled business, which is key to doing business in decentralized and local energy markets. Platform businesses facilitate exchanges between two or more independent groups of consumers and providers. The provider can be an energy company, a prosumer or any local energy supplier. By having an open platform “installed” between these groups, energy companies can enable pipeline business to connect the groups and earn money while doing so. A great example of this flexibility has been achieved at Bayernwerk AG, which worked with DXC Technology to launch the EnergyPortal. The EnergyPortal makes data more easily accessible to the many municipalities Bayernwerk serves and provides the ability to offer white label solutions that can take on the branding of other distribution system operators. Multitenant capabilities enable multiple companies to securely access data and build new applications — and drive new revenues.

Q: What are the best strategies for energy companies to unlock data?

Popal: As I mentioned, other industries such as telecom and automotive have successfully introduced new business models using data. They have introduced lean business processes and modern data warehousing systems, with effective business intelligence systems that are helping to continuously optimize business operations while advancing sales and the CRM process across B2B, B2Net and B2C markets. These industries have been bravely going through business transformations despite facing complex regulation and intense competition.

Energy companies are not so different; in fact, the opportunities to strike new gold using data to drive new business are much greater in the energy industry. However, brave decision making must take place around business and IT transformation for this change to happen. Energy companies must become trusted advisors who facilitate political change. The immense power of the fossil fuel industry must be rethought, and investments must enable digital platforms and business integration. We need to make the most of the existing data today while IT backbones undergo modernization over time.   

Q: What’s the best strategy for companies to move to green energy sources?

Popal: Companies must first define goals for reducing energy consumption, targeting sustainability and environmental protection and avoiding waste. DXC, for example, adopted such goals and subsequently reduced carbon emissions by 20.6 percent and lowered energy consumption by 10.7 percent in fiscal year 2020. As an IT services supplier, we were able to pass those savings onto our customers to help them meet their green IT goals.

Secondly, reducing the complexity of business applications and related storage, using the scalability of the cloud in the right way and adopting the on-demand user utilization of applications will help reduce energy consumption. Automating business processes, using robotic process automation where possible, will help organizations move faster. Finally, companies should implement software to intelligently monitor energy consumption across the IT landscapes, including the workplace, to match consumption with sustainability goals.

Q: What’s next for this industry?

Popal: Clean tech will be the trend for the next few decades and will impact future innovation. As energy suppliers play an increasing role in connecting cross-industry solutions to end consumers, platform business providers will have increased mandated and regulatory-driven responsibilities to enable the transition to green energy at a much faster pace. Energy consumers will have greater incentives to use green energy and more control over energy spending.

I believe, as climate change worsens, everybody will become a contributor. Influencing and achieving sustainability through our buying patterns will become more important, and people will realize that small actions to improve or avoid high energy consumption really matter. The future of mobility must move from research into reality. Smart cities are already coming, but we consumers must be willing to adopt smart things that will be available. And last but not least, we consumers should become empowered to pay more for energy consumption to achieve sustainability goals for our planet during this transition. Everyone needs to contribute. 

About the author

About the author

Khaled Popal

Khaled Popal is a partner and practice leader for DXC Technology’s Energy and Utilities business in the EMEA region. With deep industry knowledge, he believes that the big challenges of the energy business can only be solved through integrated co-creation ecosystems in which all players come together and work for bigger outcomes. Khaled has a broad background in business and technology transformation. Connect with him on LinkedIn.