Why Data is the New Oil & Other Grid Musings

Why Data is the New Oil & Other Grid Musings

Is ASEAN a region ripe for energy transformation? In a word, yes. It must be to accommodate the energy demands of the future. When the woman named Asia’s ‘first lady of coal,’ Somruedee Chaimongkol, the Chief Executive of Banpu Public Company, announces adding sustainable plans as part of her energy strategy, it becomes clear we are living in extraordinary times. Whether this is due to consumer awareness of brands that have led to green investing or a marketing ploy to gain consumer approval and even if the positive consequences are coincidental, Banpu and big tech like Amazon are contributing to an increasing amount of sustainable projects in Asia. Amazon, in particular, has five sustainable projects in APAC and has broken ground on its first renewable energy project in Singapore. Regardless of intentions, we know ASEAN needs an energy overhaul but could tech, i.e., software tools, data aggregation, be at the heart of the sustainable rollouts in Asia? CEO Amit Narayan, the Founder, and the AutoGrid CEO, thinks so and sees the region as having amazing potential. “Energy cost is actually more substantial here, than, let’s say the United States or Europe and so the benefits that consumers can get by the adoption of renewable technologies is even higher,” he said. Amit is also confident the era of transformation for ASEAN utilities has already arrived, but how should energy companies leverage AI and big data to accelerate the energy transition?

“In some ways, I like to say that data is the new oil and AI is the engine that generates power or creates power from this new fuel.” – Amit Narayan

There may not be one prescribed way of incorporating tech into the utilities systems, but data will be the pot of gold after digitalisation is fully integrated. “The whole volatility management game is the ability to take data from all the assets that you have, use that data to predict what’s going to happen in the future, and then use those predictions to drive various optimization decisions,” Amit said. Not only does data provide the opportunity to optimise a business, it also allows it to direct the flow of electrons to balance the system to manage volatility and further accumulate valuable data. “In some ways, I like to say that data is the new oil and AI is the engine that generates power or creates power from this new fuel,” he said. When the digitised systems begin aggregating data, the challenge is then harnessing the power of that data and the insights it provides to combine with the brainpower of AI. “Every new energy company I speak with is thinking about these new business models and new ways of harnessing data for their growth and survival, actually,” he said. In order to stay in the game, power companies are adapting because it’s either that or, as Amit points out, their survival will be short-lived.

One utility company focusing not on surviving but thriving is TNB. Amit had shared that he thinks there is a real opportunity to personalize utility services to get closer to the consumer and create new business models. That is precisely what TNB is currently focusing upon. TNB has launched an app to loop consumers in regarding power usage and has even shared this month how to keep energy costs down during lockdown. When we describe energy providers of the future, companies like TNB are endeavouring to pivot from antiquated business methods to becoming the poster child for a dynamic utility company that has taken on the challenges of energy transition progressively to become a leader in their field. TNB’s aspiration to rank among the top 20 utilities in the SGI World Ranking also drives the utility company to try new approaches. While there is intrinsic value in adapting with new strategies like TNB, Amit from AutoGrid also suggests utilities to see the value in the current assets.

Take Stock of Assets First

“It’s less about (just) deploying capital… it’s equally important to optimize the assets that you have intelligently,” he said. Several aspects need to be juggled, inclusive of ensuring new assets prove their worth, the implementation of new software and digital technologies are successful, but at the same time, that utilities are still empowering the customers. And human assets like consumers are just as important as tangible assets like software. “I think that’s the big theme. Just like in computing, we went from mainframes to PCs to cell phones. I think the same transformation is happening in the energy space where from centralized fossil burning power plants, which are controlled by utilities, now people are [installing] rooftop solar,” he said

From the transformation theme to another theme centring around the global energy transition, flexibility. Flexibility has come up frequently in our chats with industry experts. From Amit’s perspective, he said, “I like to tell the utilities and new energy execs that in the future, the future of utility is flexibility. Management is not just the most important thing to do. It will actually be the only way to make money because the costs are going to become free. On average, sometimes the power prices are positive. Sometimes they’re negative, as the assets get depreciated, wind and solar is free, and the value is now managing the volatility through harnessing the flexibility of the assets that you have in your control,” he said. Amit has first-hand experience with the importance of flexibility and has built flexible management applications and methodologies because he wanted to empower energy providers. There is no doubt these same applications will translate well within the ASEAN energy market because of their proven track record in the States and beyond for efficacy.

Remember to Choose Wisely

With or without specific applications, the bottom line is collaboration of all assets must be harmonious. “The goal is to create orchestration and coordination between all the different assets on the grid so that you can manage the intermittent latency and variability that comes due to the renewables that are coming on the grid,” Amit said. Consistently reviewing assets is needed now, but in the future, most everything will be automated, so really, asset management is a current necessity, whereas, in the future, the software will do the heavy lifting. “It’s a time of incredible changes. It’s like the last 100 years of energy were all about deploying capital, building power plants, investing in infrastructure. The next several decades during the transition is going to be more about how you intelligently use the infrastructure investments that you have already made,” he said. The choices with regards to strategy and investing that utility companies and the energy sector make today will affect the next 10, 20, 30 years of the advancement of the global transition. I would direct power companies preparing for the energy transition to take heed of the advice given by the Grail Knight to Indiana Jones in the Last Crusade “choose wisely.”

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