A decarbonised future is a possibility

Before now, we talked about the three D’s of energy. The worldwide super trends of digitalisation, decentralisation and decarbonisation. But in the recent past we’ve observed a few more Ds enter the discussion. Democratisation, disruption and deregulation. Some may have added a few more recently. Demoralising, dystopian, doddering? 

Regardless of your outlook, there is a new crowning jewel of energy, one D that dominates the conversation in energy policy currently. Data. 

Data is the single biggest enabler of a decarbonised, decentralised and digitised energy future. It’s the tool that will bridge the gap between where we are now vs. where we need to be to achieve net zero. 

From an investor’s perspective, data-driven business models have become increasingly common. Machine learning and AI have permeated pitch decks in the same way as Blockchain did a few of years ago. Data is trendy, but the best is yet to come. Data is about to become more open, transparent, searchable and new business models are about to expand exponentially. If you roll your eyes at machine learning and AI now, prepare for your head to spin with what’s around the corner — you could call it a ‘datatopia’.

With the use of data there are risks that need to be managed. A security-focused mindset is essential and this needs to go beyond issues of cyber security or critical national infrastructure. We need appropriate and proportionate measures to deter and/or disrupt hostile, malicious, fraudulent and criminal behaviours. We must focus on how the need to provide visibility of, and ease of access to, energy data is balanced against the need to protect related sensitive information. And crucially, we must also ensure that sensitivities which may arise from aggregation (using pieces of a data jigsaw to make a picture) are managed properly.

Yet the benefits far outweigh the risks. The benefits sit in three core buckets: supporting more agile regulation (helping OFGEM to do their job more effectively); more informed policy (helping BEIS to make commitments based on data insights); and prompting an exponential increase in new consumer applications (products that haven’t yet been invented).

But energy is just the first step. Once a common architecture is developed, data from multiple sectors and industries can flow in, helping to leverage energy, transport, construction and finance data in new ways. We could even use data to redesign the energy market entirely, increasing efficiency and the utilisation of renewables, as well as ensuring the system operates insightfully. Smart systems can become a reality.

So with this context in mind, it’s clear that investing in businesses who don’t invest in data management via a clear strategy limits returns. To maximise value, a data strategy can no longer purely be about security or privacy, it must also consider value creation. 

Businesses must invent new ways to realise value from data both within their organisation and, crucially, within the broader data landscape as a whole. In a couple of years’ time businesses will be able to access open source data from a wide variety of sources to better refine their propositions, so they need to be thinking about what will be available tomorrow instead of what’s around today.

Take the lessons from many large corporates who were the ones who started with the data headaches from having too much data.

‘It’s in different places, under different file types, it’s not clean, we can’t search it, we can’t optimise it, it’s expensive to store, it’s sensitive, is it secure, the list goes on.’

There is hardly a corporate in the energy industry who doesn’t now have a data science capability. That capability now needs to permeate all businesses, large and small. Value creation from data is an essential line item in any revenue stack and investors should be pressing businesses to think creatively.

UKRI is the body responsible for distributing government funding through industry challenges. One of these challenges is being run with OFGEM and BEIS to accelerate our progress towards datatopia. 

The Modernising Energy Data Access competition will further UKRI’s purpose of maximising the advantages for UK industry from the global shift to clean growth. Working within the Prospering from the Energy Revolution challenge, the competition will contribute to developing cutting-edge capabilities in local systems that deliver cleaner, cheaper, energy for consumers, while creating high value jobs for the UK.

By Matt Hastings of Innovate UK