The call for innovation
For more than 100 years, the way we produce and consume electricity has largely remained the same. The need to innovate the power industry is being driven by multiple macroeconomic and social trends. The first is the call to a more sustainable and zero-carbon future, driven by the increased use of renewable energy, an intermittent resource. The second is the need to electrify more than one billion consumers globally who live without electricity . Lastly, an increasingly digital economy will drive energy demand, which is expected to grow by 28% by 2040 . Each of these trends requires energy providers to create a more balanced generation portfolio, ensure reliable power, and improve asset performance.
These challenges also present unique opportunities. The convergence of technology with physical assets gives utilities unprecedented access to big data, creating an interconnected system that is in constant communication. The figure below represents the information flow diagram of the ecosystem described above.
By combining digital and physical assets, utilities are able to monitor load profiles in the system in real-time, while simultaneously adjusting grid operations without any human intervention .
Machine learning and digitization at Enel
Machine learning allows for greater predictability, which helps Enel in two broad categories. The first is process improvement, primarily through an improved ability to monitor large industrial assets, which reduces operating costs. While Enel has created innovations in this regard on multiple fronts, some examples include:
- Big Wind Data Boost: a program that puts sensors in wind turbines, which anticipates predictive maintenance, leading to increased efficiency and immediate cost savings 
- Kaplan Online Optimization System: a proprietary algorithm that increases the efficiency of hydroelectric turbines by decreasing downtime through the automated positioning of turbine blades 
The savings from these digitization projects are significant. GE Power estimates that a digital wind farm can deliver up to $100 million in cost savings and increased efficiency . While inward looking factors impact Enel’s bottom line, it is external opportunities that will create lasting value for the company. Due to the digitization of its assets, Enel now has greater visibility into the supply side of energy. In order to better understand the demand side, the company rolled out ‘smart meters’, which push detailed consumption information to the utility. The deployment of 40 million of these smart meters globally gives Enel a large data set, which in turn allows it to forecast demand patterns more accurately . These devices also give the consumer more information on their energy usage, helping them identify potential savings.
Big data changes the utility business model
All data resulting from Enel’s digitization projects are centralized in a ‘data lake’. How then does the company translate all that data into lasting value? The primary benefit is that it is able to integrate more renewable sources into the grid without compromising long-term reliability. By accurately predicting supply and demand, it is more equipped to deal with the intermittent supply of renewable power and can therefore move to a more decentralized system, giving rise to new business models in the process; technologies of this model are outlined below :
Source: World Economic Forum
Indeed Enel has created multiple products in these key technologies. For example, it has commercialized an ‘Energy Intelligence Software’, which uses machine learning to help commercial clients automatically identify actions to benefit from energy-saving initiatives. It offers clients turn-key distributed generation systems, which allow customers to generate their own power locally. This gives the customer control over the energy used to generate the power it consumes, as well as creates a more resilient supply of power in the event of blackouts.
Building on progress
As decentralized energy model penetration increases, so does the need for seamless interconnection between these systems. The company must therefore create the market for peer-to-peer transactions to allow energy to be traded across systems. To address this Enel is experimenting with blockchain through Enerchain, a software piloted by Ponton with over 24 energy-trading firms .
One of the biggest challenges facing machine learning is our increased dependence on computer systems, leaving companies susceptible to cyber security risk. In 2013, 40% of all cyber attacks targeted the energy sector; as a result, 91% of power generation organizations experienced an attack . As the company increases the digitization of its industrial assets, it will increasingly be seen as a potential target, and thus necessitates taking preventive action.
The opportunity for a clean, sustainable future is upon us. Utilities now have the tools to transition toward a zero-carbon economy, with Enel at the forefront of this transition. As the industry increasingly adopts the digital model, how can it ensure the security of energy assets, which help form the foundation of society?
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 “Powering The Future: Leading The Digital Transformation Of The Power Industry”. GE Power 2018. https://www.ge.com/content/dam/gepower-pw/global/en_US/documents/industrial%20internet%20and%20big%20data/powering-the-future-whitepaper.pdf.
 “Enel Experience In Smart Grids”. Montone, Alessio. Presentation, 2018.
 “The Future Of Electricity: New Technologies Transforming The Grid Edge”. World Economic Forum. 2018. http://www3.weforum.org/docs/WEF_Future_of_Electricity_2017.pdf.
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