Digitalization in the energy sector

Critical infrastructure here, AI there: what challenges is the energy sector facing?

Two of the most pressing issues of recent years come together here: the energy transition and digitization. And let’s start with the good news: the energy transition can only truly succeed because of digitization.

For decades, energy providers benefited from the stability of their business model: customers needed a product that has remained essentially unchanged for a century – electricity – but in ever-growing amounts and across countless points of consumption. Strong energy providers ensured exceptionally high supply quality. Now, however, comes a new challenge demanding flexibility and agility in ways never required before: digitization.

Example: Operating critical infrastructure in times of AI and increasingly professionalized cyberattacks requires not only the highest levels of technical expertise, but also the agility to respond swiftly. At the same time, customers are demanding more digitalized products, which in turn depend on the ability to leverage the wealth of data that energy providers already generate – or could generate – across their business. This opens new opportunities: treating digitization as a chance to establish digital business models, further develop the sector, and actively shape the energy transition.

Where are the greatest opportunities?

To answer this, we need to look across the entire value chain. Energy is no longer produced solely in centralized plants, but also increasingly in decentralized ways – through solar panels or wind turbines. Whoever operates them needs the right platforms to trade energy “peer to peer.”

Another aspect is “Energy as a Service.” Energy providers do not necessarily have to own and operate the assets themselves. Instead, they can bundle and market energy sourced from third parties as strong, digitalized products – and suddenly, the supermarket becomes an energy provider, something unthinkable in the past.

From there, it’s only a small step to virtual power plants. Large plants remain reliable producers, but if the output of a single power station can be matched through a centralized digital network, providers can significantly reduce investments and improve competitiveness. This would never have been considered a viable source before – today, it is a real opportunity for new business models.

And of course, electromobility is also a driver, accelerating alternative forms of production, new sales channels, and shifting demand patterns. The product “electricity” itself is undergoing a relevance upgrade.

Why is the transformation particularly challenging in the energy sector?

With its vast asset base and strict regulation, developing digital products may be the smaller challenge. But these products must function in a business where networks and infrastructure are core – and cannot simply be “booked as a service.” Moreover, the core product addresses basic human needs, while individual customer preferences are less obvious. Still, the market increasingly demands energy “as a service.”

The challenge, therefore, is to transform the entire business model at once – especially as new players enter the market, such as discounters offering digital products or investors pushing decentralization, digitization, and decarbonization of the energy economy.

Why is cultural transformation so critical?

Yes, we can become data-driven and deploy advanced analytics or generative AI. But people play a vital role in breaking down complexity, making decisions, and maintaining control.

Cultural change is crucial to adapting long-standing mindsets and behaviors that have served well for decades. Technology matters, but equally important are agility of thought, the ability to embrace and adapt to change, and organizational structures that favor cooperation over hierarchy. This is what makes cultural transformation successful.

How can Detecon support energy providers in this transformation?

Put simply: been there, done that. We are experts not only in digital business, data-driven business models, AI, IT/OT strategies, and cybersecurity – but also, by our very nature, in networks and infrastructures.

The telecommunications industry faced similar challenges years ago, and the lessons learned transfer exceptionally well. Our unique strength is bringing together strategy, culture, organization, technology, and network expertise under one roof – and we are already applying this for our clients today.