The Australian utilities sector is facing a wave of disruption, and local executives believe it will hit sooner rather than later.
A clear majority of executives who participated in a survey commissioned by OpenText believe most of the disruption to occur in the next five years.
A third said they thought it would take a decade to see the disruption affect the sector. None, however, believed it would take as long as 15 years.
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When it comes to disruption in Australia, these executives said operations is the area that will be most disrupted followed closely by customer service.
When respondents were asked which area is most ripe for disruption those positions were reversed, which might again reflect the larger number of retailers among the respondents.
The senior executives in the utilities sector expect this impending disruption to be driven by startups rather than the sector itself.
In fact, these executives are banking on the idea much of the innovation comes from partnering with startups.
For example, Origin Energy has a global accelerator program called Free Electrons, that lasts for a year supporting eight startups with “clever and innovative energy solutions”.
Disruption could also come from the technology giants like Google.
Chatham House noted in a paper called The Power of Flexibility: The Survival of Utilities During the Transformations of the Power Sector, “Enhanced system flexibility and a growing role for these technologies will provide new entry points for highly disruptive market actors, many of them not traditionally associated with the power sector.
“These actors include powerful technology companies and automotive manufacturers such as Google, Tesla and BMW. More widespread electrification of transport, and eventually of heating, will change the political and regulatory landscape of the electricity sector.”
Preparing for dramatic change
The study shows it is clear that executives are preparing for dramatic change and many expect the impact of that change to be felt sooner rather than later.
According to Stuart White, director, institute for sustainable futures at UTS, “The utilities sector is being disrupted and the question is how that will shake out. And part of that is digitalisation.
“That is because digital technology allows us to do things cheaply that we couldn’t do five years ago.”
He says energy companies are the most advanced in their thinking and activity, with water considered to be some years behind, and gas barely out of the starting block.
He explains, “The difficulty is the technology. In some cases, the physical technology is more difficult to do. To actually measure the flow of electricity is as simple as putting current transformer clips over wire. We’ve had those for decades.”