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The Topic: Transformation UTILITY WEEK | 21ST - 27TH JULY 2017 | 11 AN ASSET-LIGHT FUTURE? During a leadership debate about utilities transformation, UK Power Networks chief executive Basil Scarsella speculated about an asset-light future for networks and other utilities (see p13). Developing this idea, IBM energy & utilities leader Phil Spring said his company had identified four major technology types driving transformation in utilities: 1. Energy technologies: fuel cells, solar PV, energy storage, microgrids, etc. 2. Consumer technologies: smart appliances, electric vehicles, social networks, etc. 3. Information technology: cloud, cognitive computing, blockchain, big data and analyt- ics, etc. 4. Grid operational technology: embedded micro-processing, automated demand response, active network management, etc. Of these, the first three are inherently asset light, he said. Just 5 per cent of the 100GW of solar photovoltaics now installed across Europe is owned by utilities, the rest by investors and individuals or communities – "that means you don't need capital to access that capacity". Likewise, consumer technol- ogy and information technologies are asset and capital light, Spring continued. If you then take into account the decarbonisation of the grid and forces for decentralisation, he said, "you start to see a breakdown of the value chain and the emergence of a new ecosystem that operates around different platforms". The diagram below shows how IBM imagi- nes that new platform-based ecosystem. As the utilities sector moves towards this, Spring warned, it is "ripe" for disruption from asset-light pioneers like Airbnb and Uber. Blockchain is a new buzzword for utilities. It offers a way to transform the power of consum- ers in the energy system, giving them "self-sovereign identity" and empowering them to create peer-to-peer trading groups. For utilities, this is both a challenge and an opportunity. At Utility Week Live, Deloitte Digital partner in consulting Duncan Barnes described blockchain as "a means of exchanging value". "Blockchain's applicability in the case of utilities will be to allow people to exchange value in the form of electricity," he said. People with solar panels and a battery storage system might choose, for instance when they go on holiday, to transfer the value of their stored elec- tricity to another member or members of their community in exchange for tokens of value. Microgrid communities are already using blockchain in this way, said Barnes, pointing to examples in Brooklyn, US, and Melbourne, Australia. Barnes admitted that these were "small instances globally" so far. However, the scope for blockchain to bypass utilities, banks and other traditional cen- tres of control for trading and the verification of consumer identity should be taken into account in industry transformation strategies. City Services EPC Energy Mgt Services Elderly Care Healthcare Energy Generation Trading T&D Retail Information Services Traffic Information Optimization Asset Analytics Energy Data Services Marketing Services Customer Intelligence Forecasting Security Insurance M&E Home Automation Usage Monitoring Energy Efficiency Energy Audit Micro Generation Energy Aggregation Demand Response Gentailer Energy Exchange O&M Services Commodity Generator Renewables VPP Microgrid Storage Home Experience (B2C) Grid Manager Grid Developer Mobility Telco Metering Grid Services Business & City Experience (B2B/B2G) Electric Vehicles Facilities Mgt DER A future Utilities industry model of platform ecosystems Weather © 2017 IBM Corporation At a meeting of the Utility Week-Wipro Technology and Innovation Council in May, Innovate UK's Jonny Voon focused on the way in which block- chain's ability to give consumers "self-sovereign identity" could disrupt traditional ways of thinking about the value of customer data and the pro- cess of verification. It could overcome problems in tracking transient vulnerability, he suggested, as well as challenging the established concept of utility "contracts". HOT TOPIC: BLOCKCHAIN This powerful new technology could allow consumers to become players in the energy market. How does 'self-sovereign' identity work? Provider: Are you a vulnerable consumer? Provider: I accept that you qualify as a vulnerable consumer Local authority: We ATTEST that this person is on a housing benefit Local authority Local authority Bank Bank DVLA DVLA Person Person Utility provider Utility provider Consumer: I claim that I am on a housing benefit and less able to pay my bills Attestation Attestation "The fourth industrial revolution is about data and technology. Innovation will change all of our lives." • Martin Luff, framework design manager, MWH Global