Survey: 76% of utilities are already implementing digitalisation plans

According to LF Energy’s latest survey, 76% of utilities – drawn from respondents across the US, Europe and Asia-Pacific – are already implementing digitalisation plans and 64% are making extensive use of Open Source Software (OSS).

This is according to LF Energy, an open source foundation launched by US-based Linux Foundation, in their 2023 Energy Transformation Readiness Study.

The report, developed in partnership with LF Research, Linux Foundation Training & Certification, G-PST, RWTH Aachen, and Zpryme, provides survey-based insights into energy sector digitalisation through open source.

According to the survey, 76% of energy stakeholders surveyed report their organisation has a clear strategic plan for digitalisation and that they have already begun implementing it.

Additionally, 64% of energy stakeholders use more open source software than closed source, however, a plurality (43%) believe energy industry consensus is still key to increasing OSS adoption.

Key findings from the report include:

• 51% of energy stakeholders see Information Technology (IT) and Operational Technology (OT) on the way to convergence in their organisations. According to LF Energy, where this is the case, it can be implied that the organisations involved are on the verge of transforming to their deepest layers.
• Digitalisation plays a critical role in decarbonisation by enabling smart home energy management, EV charging and improved demand response.
• Cost reduction and transition speed-up are the main benefits of OSS in the energy sector, while performance, support and security are the main barriers to adoption.
• Open source software reduces grid complexity by enabling the integration and management of Distributed Energy Resources (DERs) and easing application development.
• Half of the organisations surveyed believe that software and open source skills should be covered in training programmes.

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Respondents in the Asia Pacific region were found to be the furthest ahead with implementing digitalisation plans at 84%, followed by North America at 78% and Europe at 62%.

However, the survey also points out that another 31% of European organisations are in the preparation stage: They have a plan, but it has not been implemented yet, or the plan is currently being developed.

Nearly all respondents who have not already begun implementation already have a plan in place and ready to be implemented, or well into development.

“We have heard from utilities and other stakeholders anecdotally for some time that the energy sector has accepted that digitalisation is the only path forward to transition energy systems to renewables, so it is encouraging to see this research confirm that,” said Linux Foundation general manager, Arpit Joshipura.

“That battle has been won, but the LF Energy community must reinforce to these stakeholders that open source is the most efficient and effective way to complete a digital transformation that ensures these systems are interoperable, resilient, and secure.”

Be prepared

According to the survey, a lack of preparedness for digitalisation can have a variety of consequences for energy-related organisations, including issues related to competitiveness.

31% of the survey’s respondents saw missed opportunities in relation to transportation electrification and 31% saw an inability to maintain position in the market.

When it comes to digitalisation preparedness for US utilities, states the survey, a lack thereof might be also correlated with negative regulatory relationships, confirming that penalties, fines or regulatory actions due to energy service violations are also seen as a consequence.

LF Energy states that a major factor to consider is that digitalisation is simply inevitable; the future of industry sees all things electrified and decarbonised. Most new DERs are unpredictable by nature and to be integrated within the grid, energy stakeholders need new digital capabilities.

OSS the way forward

According to the report, 64% of organisations reported that 50 to 100% of the software they use is OSS; consistent with OSS often being perceived as software that “is everywhere but not visible.”

As OSS often requires technical capability, states LF Energy, some energy sector operators are ahead of others – more traditional grid operators still rely on vendors for their software solutions while Alliander was found to be a frontrunner for OSS use as a grid operator.

66% of LF Energy’s sample were found to be strong believers in OSS with the remaining 34% partially unconvinced; LF Energy points to this as confirmation that organisations would be ready to utilise OSS if belief can be translated into actual use.

According to the survey, cost reduction and transition speedup were found by the survey as the most popular benefits of OSS; flexibility the most promising feature.

Data collection for the survey took place in 2022 Q4; LF Energy received 441 valid responses.

The survey included questions in the following areas: demographics, the current state of digitalisation, benefits of digitalisation, the current state of open source uptake, governance, benefits and barriers of OSS, skill demand, outsourcing and training.