Reinvent business models

The transformative power of Digital

The Energy transition requires a rethink at the heart of the energy industry. According to a UK Energy Research centre report, if the Net Zero target is to be met, organisations will need to make a “fundamental change to their business models and operating practices”.3

As the major disrupter of the modern age, Digital will fundamentally change the way the energy industry operates. By breaking down traditional value chains, it will allow businesses to make new connections and business models that cut across traditional links in the value chain – even beyond the historic concept of the ‘energy sector’.4 With its disruptive capability already proven, embracing Digital will be key if energy players are to rethink their business models to achieve Net Zero.

The development of platform business models is one example, allowing for collaboration between new market entrants and traditional market players through the integration of multi-sided buyer seller configurations, such as utility-as-a-service. Digital technologies also enable the bundling of value, for instance through vehicle-to-grid technologies, where spare battery capacity can be sold on reserve markets.5

Digital aggregation and innovation

German virtual power plant operator Next Kraftwerke, now part of Shell, connects power-producing assets from renewable sources such as biogas, wind and solar with commercial and industrial power consumers and power-storage systems.6

Next Kraftwerke’s innovation opens new avenues for connecting and sharing renewable energy sources. By integrating power from numerous individual power plants, they can spread risk and improve renewable energy companies’ participation in the market.7

From Big Oil to Big Energy

While addressing the Net Zero challenge, leaders in the energy market are using data and digital technologies to better understand themselves, their customers and the market to reinvent their business models. In this way, they are acquiring a digital advantage that prepares them for the demands of the future – both in the short and longer-term.

The energy players that take the lead in the energy transition will be unafraid to explore new opportunities and change the course of their business. An oil and gas multinational BP, for example, is in the process of reinventing its business model – transitioning from an international oil company to integrated energy company in order to achieve its Net Zero ambitions.8

Digital set to underpin offshore wind effort

Demand for offshore wind is growing, with the UK government planning to increase offshore wind capacity from 30GW to 40GW by 2030.9 As the industry continues to grow in scale, Digital will be essential to underpin efficient and effective management while continuing to reduce operation and management costs. Predictive maintenance technologies, for example, are helping to drive down the cost of the repairs within the industry, with unplanned turbine failures having significant impact on commercial performance.10 The oil major BP has extended its partnership with Palantir, leveraging its ‘digital twins’ software to optimise wind farms and solar generation.11 12