Transform and innovate if you want to remain a player in energy sector

Innovations are becoming increasingly important in the energy sector, which, though a traditional and regulated one, today is at a huge turning point: decarbonization is becoming mandatory while digitalization is introducing numerous non-traditional entrants. Ultimately, if you want to remain a player in the energy sector, in the long run, it is essential to continue to transform and innovate, says Elena Boskov Kovacs, a Managing Director and Co-founder of Blueprint Energy Solutions and a consultant combining innovations and creativity to impact clean and secure energy transition, in an interview for the Balkan Green Energy News.

Recently you have been elected a Co-Chair of a body that provides advice to the European Commission on advancing energy transition. Which aspect of the transition in particular?

I currently co-chair an expert group within the ETIP SNET – The European Technology and Innovation Platform for Smart Networks for Energy Transition, which has a high impact on current EU energy and digitalization initiatives. Its role is to guide research, development, and innovation to support Europe’s energy transition with the energy transmission and distribution systems innovations.

My working group specifically provides thought leadership and guidance to the European Commission on Energy Digitalization and Customer Engagement when designing action plans and roadmaps impacting investments and policies. No matter how large or influential in the European landscape, companies cannot innovate in a vacuum. That’s why it is crucial to learn from best practices implemented by some of the most prominent industrial vendors or system operators in Europe in an environment this platform provides – where innovation is a shared, collaborative effort.

Not all actors in the energy sector are fully benefiting from the potential of digital technologies today, especially in SEE. Why?

Developing, implementing, and upscaling digital solutions in energy supply, demand, and transportation (transmission and distribution) to support the energy transition have not yet reached their full potential. In particular, many companies in SEE are only starting informatization and digitalization of their processes. The energy industry still has a challenging task ahead to integrate all of its systems and utilize the data. Also, IT companies tend to focus on other more profitable sectors as energy companies are not sufficiently aware of possibilities. 

In order to facilitate the process, we need to promote good examples, such as integrating data from weather forecasts and sensors that can reduce the cost of maintenance and increase the output of wind turbines, or better management of utility-sized solar plants hence lowering the cost of renewables projects. 

When the digitalization trend hit the energy industry several years ago, energy companies struggled to understand how to reap the benefits of global digital brands like Google or Amazon. So, my working group collected the use cases from the most prominent industrial vendors and energy providers on the most promising digital technologies and pilots with concrete examples of investments needed, products developed, and profits or savings achieved.

 I have also shared this with my clients. One of them called it a “must-read for any utility, aggregator or system operator preparing to survive energy transition.” However, many companies are experiencing a problem motivating certain management structures to change, and an external party or a team can help.

You are originally from this region but have had an international career and currently manage Vienna’s successful ICT services and advisory company. Is there a difference in approach to innovation between different markets in Europe in terms of investment or technologies?

I have spent two decades in the energy industry. After having worked for international energy corporations and consulting houses worldwide, today I am a Managing Director of an Austrian-based Think-tank, Blueprint Energy Solutions, engaged on projects involving energy transition, digitalization, and cybersecurity across Europe. Working on different markets, I can say that there is a difference in the boldness of approach and budgets allocated to new innovative projects across Europe. Still, I would not say it is dependent on the geographical region – you have companies that aim to be leaders of the future in every market. 

Knowing that the success rate of new business initiatives is not high, it is necessary to establish appropriate innovation processes and systems that clearly show the companies’ mission so that both top management and employees know in which areas to innovate. Then decisions about what to give up and what to develop next can be made quickly enough. 

We are working with very innovative clients in Switzerland, Slovenia, Bulgaria, and Greece that have already established new digital offices or departments with a clear vision and targets. We formalized some of these initiatives into roadmaps and future pilots or projects: enabling cutting down grid losses by several percent, reducing grid congestion to enable more grid flexibility, enabling the implementation of predictive maintenance through the design of online monitoring systems and asset performance management systems, or reduced spending on implementation or maintenance of new IT systems and automation between 15 and 25 percent. 

But even more so, the latest innovative programs we helped design keep the employees engaged and motivated in using these new solutions since people must be at the core of every transformation, especially when we are talking significant investments into new, innovative technologies.

How do you assess the FIT for 55 package recently launched by the European Commission? What challenges will energy companies face, and how do the stakeholders from the Balkans perceive it?

This package goes way beyond just supporting the EU commitment to reduce net greenhouse gas emissions by at least 55 percent by 2030. There is a clear motivation to increase the competitiveness and innovation of the European energy ecosystem while making the transition to a European net-zero economy. The global GDP growth worldwide was expected to be 2.9 % in 2019, with a moderate increase in 2020, but then the pandemic was onset. Most organizations, including power grid business owners, targeted their growth at a much higher rate. 

Pandemic accelerated digitalization of the world in many ways and increased the need for new and innovative solutions required to achieve this above-average growth while mitigating operational risks. Also, in 2020 clean energy companies have performed well on financial markets, with renewable power companies outperforming both listed fossil fuel companies and public equity market indices in recent years and with lower volatility. This is a chance not only for the Balkans but for Central and SEE countries in general.

Industrial developments, such as renewable integration and demand response systems, require the role of grid asset owners to be increasingly agile today. With nearly 20 percent of assets worldwide near the end of life, careful decisions must be made regarding these assets’ operation, maintenance, and replacement decisions, especially with intermittent renewables being increasingly connected to the grid. 

Power systems and the supporting human processes are becoming more complex. Therefore, well-managed digital solutions can place useful asset data closer to the day-to-day consumers of such data – operators and engineers. My business partner focused on this, particularly in the previous few years – supporting several TSOs in Europe to design their asset performance management strategy and implementation. We have also gathered the team around us with whom we can pour ideas into success stories.

It is essential to mention that energy companies will continue to experience tighter regulation and increased compliance risk due to new regulation and awareness of environmental and economic impacts. This is particularly important when we talk about the security of supply and underlying cyber security of energy infrastructure. Two years ago, we worked for the Energy Community Secretariat on a cyber security study and did experience first-hand increased awareness of national regulators and infrastructure operators in the region about this closely linked topic. There are good examples and fast movers that already understand how innovation and security must go hand in hand to achieve European goals.

The need for more flexible electricity markets to match demand with supply is becoming more urgent as renewables are increasing their portion of Europe’s energy supply. How do innovation and digitalization play a role in this? What can be a good example for the Balkan/SEE region?

Innovation and digitalization create opportunities for companies ranging from large-scale infrastructure to easy-to-budget smaller projects with high impact for the future. 

At the end of 2019, Blueprint Energy Solutions joined a consortium led by Spanish company ETRA for a 4-year EU project called “X-FLEX” with an investment value of EUR 9.5 million. The project comprises 12 partners from six countries. Over 20 experts from Spain, Slovenia, Austria, Bulgaria, Greece, and Cyprus are working on designing, developing, and demonstrating a set of tools to integrate the emerging decentralized ecosystem of renewable energy sources and flexibility systems into the existing European energy system, involving multiple flexibility assets (batteries, power to heat/cold, vehicle to grid and other storage solutions) and all complementary actors of the energy network, with special attention to extreme weather conditions. 

The X-FLEX project predicts increasing renewable production in these countries by nearly 6,992 GWh over the next five years. This increase in RES production will entail a reduction of 5 million tons of CO2 equivalent in these three countries. It is also expected that the project will increase 28 percent of renewable energy into the distribution grid of demonstration regions by 2023. 

These solutions are piloted in actual conditions in four pilot sites in Bulgaria, Slovenia, and Greece, with different needs and socioeconomic and technological boundaries. Well-established companies from the region are participating in the project: Petrol d.d., Slovenian DSO ElektroCelje, national DSO of Greece – HEDNO, electricity TSO of Bulgaria ESO, as well as aggregator and holiday resort “Albena” that has been awarded a Green Oscar for its contribution to the environment. Several research institutions and ICT companies are working on this common goal. 

The X-FLEX project may represent a call to action for the Balkan/SEE region – companies should leverage experience gained from new technology pilots and market model designs to prepare for the new legislation that will surely follow a similar path to other EU countries in the future.