Digitalisation of energy distribution and retail – a $33.4bn market by 2030

The digitalisation of energy distribution, retail processes and infrastructure will continue in the next decade and transform the power sector, according to a new report issued by Frost & Sullivan.

The report states that spending on digital tools within the energy distribution and retail industries will increase by 10.5% from $12.33 billion in 2020 to $33.42 billion by 2030.

Frost & Sullivan states that utility investments in software, analytics and information technology services and solutions including cloud computing, big data and IoT will enable them to transform business beyond commodity selling and open new revenue streams.

The three main areas utilities are targeting to enhance processes by deploying advanced solutions include customer services, optimal grid operations and connected and integrated businesses.

North America, Europe and Latin America are expected to dominate the market.

Maria Benintende, Industry Principal, Energy & Environment at Frost & Sullivan, said: “Power grids are the backbone of the energy transition because they are a fundamental enabler of demand electrification and decentralised renewable energy (RE) integration. Hence, the digital transformation of power distribution companies and energy suppliers is a major trend that represents a considerable business opportunity.

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“While digital investment has been traditionally aimed at the digitisation of internal processes to reduce workloads and save costs, it is now increasingly being aimed at reinventing business models and creating new streams of income through connected businesses.”

The study states that cloud computing is increasingly becoming the foundation for utilities’ digital transformation owing to its ability to make “automation and integration between various services simpler, scalable, and less expensive.”

The study also highlights that digitalisation is enabling energy firms to address the challenges and reap benefits associated with the proliferation of smart technologies including smart appliances, electric mobility, and distributed solar and storage.

As a result, new business models are becoming available and shaping the energy transition.

Markets trends providing players with opportunities include:

• Educating utilities on the benefits of metering data: Vendors should develop smart mobile device management (MDM) platforms that are easier to deploy, scale and maintain to enable utilities to fully leverage the benefits of AMI.
• Expand software as a service (SaaS) offerings to everything as a service (XaaS) value propositions.
• Strengthen cloud computing capabilities to streamline digital transformation.
• Opting for microservices architectures.

Find out more about the report.