Chapter 8
Quintessential Innovation for Transformation of the Power Sector
John Cooper
Prsenl, Austin, TX, United States
MaaS Energy, Austin, TX, United States
Prsenl, Austin, TX, United States
MaaS Energy, Austin, TX, United States
Abstract
The chapter recognizes fundamental aspects of change as crucial barriers that block the critical power sector from adapting to a complex future, such as the Pace Problem (despite relative advances made by utilities in adapting to changes, more aggressive, speedier change outside the industry leaves utilities falling behind, raising consequent risks to long-term stability in this essential industry). This chapter offers a compelling solution that borrows successful best practices from other industries to accelerate adaptation to change. It proposes a framework for Iterative Innovation to accelerate the pace of change inside individual utilities and the industry as a whole. Integrating this five-step framework with a five-phase business transformation maturity model creates a standardized platform for change—Quintessential Innovation (Q2i)—to answer the confounding aspects of ongoing and accelerating change. By adapting this platform for an expanding energy ecosystem, utilities can also unite with consumers and rising prosumers for integrated, sustainable, innovative change.
Keywords
pace of change
utilities
business model
Innovation Cycle
iterative innovation
business transformation
Innovation Platform
Integrated Change
1. Introduction
In the controlled environment of regulations and monopolies, electric utilities have grown accustomed to an evolutionary change environment managed through top-down rules and processes. Used to managing and controlling change, incumbents now face changing conditions that risk the loss of that control and unanticipated negative outcomes as described in other chapters of this volume. Fundamental changes over the past decade now challenge old assumptions and stress these foundations, begging the question of how utilities may respond and maintain their important place in the economy and society. This chapter argues that innovation is the key to answering the challenges of ongoing and accelerating change and bringing utilities into synergy with other stakeholders in the emerging energy ecosystem.
A first step in tackling these twin challenges is to acknowledge new realities associated with change only now becoming apparent. The first reality is that change, not status quo, is the new cultural norm: that is, tomorrow is likely to be less like today. We should start expecting disruption, rather than continuing to be surprised by it. But most organizational processes inside utilities still remain structured around execution of routines designed to maintain quality of service and manage growing complexity. The second reality is that the pace of change accelerates in today’s digital world: that is, if you are not moving forward and faster to keep up, you are falling behind. Again, most large bureaucratic organizations are challenged to become sufficiently flexible and adaptable to change so rapidly.
Understanding the problem—new realities associated with change—leads to a discussion on the principal consequence, rapid disruption and destabilization, and the potential of digital technologies (especially data analytics) and new business models to answer those challenges. With a foundation in data analytics, utilities are able to shift to a new approach to change that marries innovation with business transformation—not as a one-time project, but as a new organizational foundation that anticipates and answers ongoing, accelerating change with innovation, flexibility, and resilience.
This chapter connects the dots between (1) the challenges of change—most notably, Decarbonization, decentralized energy resources (DER) Integration, and Grid Modernization; (2) a new driving vision, the coming Energy Internet Economy; and (3) the innovation and business transformation strategies required to achieve that vision.
The rest of the chapter is structured as follows. Section 2 examines the twin challenges of adapting culture to ongoing change and business models to accelerating change. Section 3 introduces the Dynamic Innovation Cycle as a tool to understand individual and organizational adjustments to embrace, rather than fight, dynamic change. Section 4 examines data analytics as the foundation of a platform that supports strategies in response to serial disruptions and introduces the Quintessential Innovation (Q2i) platform, designed to make innovation the foundation of sustainable business transformation. Section 5 examines the emerging Energy Innovation Market featuring the rising energy prosumer, the emergence of platforms and apps enabled by the Q2i approach, and the growing importance of market data followed by the chapter’s conclusions.
2. Twin challenges: nonstop, ever faster change
Electric utilities, and more and more, new energy economy stakeholders as well, face a twofold challenge. First, adaptations to climate change drive more rapid decarbonization of the energy supply chain, starting with coal now, and moving on to petroleum and natural gas in the coming decades. Filling in the gaps left by receding fossil fuels are innovative forms of clean energy and DER, driving the personalization of energy and creating new markets of rising prosumers. Second, change is becoming dynamic—changes driven by technology advances occur at an increasing pace, putting increasing pressure on incumbent companies to adapt. Changes just now becoming apparent can be expected to continue to unfold and to accelerate over time. This dynamic state of constant and increasing change is unprecedented in an industry historically defined by stability and long-term capital investments in infrastructure.
All energy consuming and producing individuals and organizations will need to find ways to accommodate ongoing change that moves faster over time. This Pace Problem will hit conservative institutions like governments and electric utilities especially hard. The advancing disparity between rapid external change and slower, more methodical internal change creates a compounding problem that signals the need for a paradigm shift. To address these change challenges and keep pace with still more changes in the future, innovation in all its forms will become the means for fundamental shifts in our approaches to energy.
Consider, for instance, business practices in the grid ecosystem and the Internet economy with regard to innovation. Where the grid ecosystem moves slowly to ensure system reliability and regulatory equity, the Internet economy has embraced the concept of emergence, a signature quality that leverages innovation to address constant change. Emergence and innovation open the entire system to new industry players who seemingly introduce transformative concepts overnight, growing large with market acceptance, recently described as Big Bang Disruption.1 Perhaps the best evidence that such disruption has become commonplace in the Internet economy is the rapid dominance of platforms provided by companies like Google and Amazon, which emerged and steadily grew to ubiquitous influence over the consumer economy with a common business model: harnessing data to drive innovation.
One way for the electric utility industry to accelerate adaptation to innovation will be to take it in small doses. In this way, Iterative Innovation may become the key to situational data analytics, grid optimization, power continuity, DER resilience, sustainability and fossil fuel transition, and a shared future of Personal Energy. Given the collapsing timeframe to address transformation challenges, effective and sustainable business and utility transformation will depend upon collaboration among utilities associated with innovation.
As introduced above, driving this innovation imperative is an increasingly dynamic energy environment characterized by new technologies and business models introduced at a dizzying rate, well beyond the capacity of today’s utility organizational culture and regulatory conservatism to keep up. A new paradigm that not only integrates technology in creative ways, but also goes beyond technology to embrace cultural, organizational, and institutional transformation, is needed to make the nascent energy Internet—the eNet—more like the Internet and less like the grid. This chapter will outline the connections between innovation and various aspects of change, leading to a formula for market and industry transformation, and importantly, a formula that is still possible in a collapsing timeframe.
Embracing change while preserving legacy investments that still have value won’t be easy, not by a long shot. Conventional approaches, like extending the current top-down grid management paradigm with technological enhancements or system redesign, will encounter fundamental challenges from ongoing environmental changes, including:
• the rise of third-party competitive energy efficiency and site-based energy alternatives to grid power;
• consequent flat or declining utility rate-based revenues from diminishing kWh sales;
• the rising cost of grid modernization and a managed transition to a new paradigm and related resource needs; and
• nontechnology transition challenges (organizational change, community energy with third-party stakeholders, new business models, regulatory reform and changes in energy policy, etc.).
These are the elements that are increasingly understood to drive the need for business transformation, a broader term that embraces technology changes as a component, but looks more holistically at new business models and an evolving energy ecosystem. But to address these broader issues successfully and in a timely fashion, such business transformation won’t be enough: a transformation framework that embraces innovation will be needed.
To summarize, ongoing change and the pace problem require innovation, business transformation, and a transformation framework to achieve the qualities of adaptability, reliability, and resilience needed in the future. For instance, a typical utility’s grid topology must be transformed from a one-way “step down” distribution network into something closer to the Internet’s highly redundant mesh. Certainly a variety of new technologies and business practices would be needed to accomplish such grid transformation. But as complex as grid redesign and technology integration would be while maintaining reliability and low energy prices, there’s one more thing standing in the way of technology and business model upgrades: cultural acceptance.
For transformation success, individuals and organizations must be willing to accept innovation as the new cultural norm. The imperative of innovation is highlighted throughout this book, but especially so in the chapter by Woodhouse and Bradbury. Section 3 addresses the cultural change that will be enabled by a Dynamic Innovation Cycle and remaining sections will describe how organizations can turn innovation into a core competency.
3. Managing the new reality of dynamic change
The human element, generally overlooked in discussions of innovation, transformation, and technology, is fundamental to any successful organizational change program. Recurring and incessant, the ongoing change we’ll face going forward will be driven by two fundamental themes:
• Climate Change as a growing, cataclysmic threat to global societal and humanity; and
• Personal Energy that empowers energy consumers and prosumers—the emergent, individual, and collective response to that threat.
Climate Change holds the potential of unavoidable catastrophe, absent serious mitigation as seen in the Paris Agreement,2 ratified on October 5, 2016, and effective 1 month later. As coal recedes as a source of electricity, natural gas and petroleum must follow for global temperature rise to be contained. The shift from fossil fuels to a clean energy economy promises an increasingly dynamic energy ecosystem that is ever more dependent on ubiquitous, reliable electricity. Such business transformation will include a shift from selling electricity as a commodity to viewing clean energy as a personal service. Personal Energy as a service will require every individual, and organizations of all types and sizes, to adapt to ongoing change. The acceptance of Personal Energy will grow with improved technologies and new business models and widespread consumer adoption will contribute to an improved toolset for addressing change and disruption.
Based on innovation, Personal Energy will require multiple passes through the Dynamic Innovation Cycle, as in Fig. 8.1. With each pass, it is hoped, personal or organizational familiarity with the pattern and developing skill sets will make the process more seamless, even automatic. The Dynamic Innovation Cycle is especially appropriate given that the urge to deny climate change is strong, the path to mastery in Personal Energy is difficult to discern, and Energy Innovation is at the heart of any solution. This 12-step cycle addresses rapid and episodic disruption, the fundamental challenge facing individuals and more particular to this chapter, those inside utilities and other organizations that must grapple with significant change and transformation.
1. Epiphany. The beginning step of the 12-step Dynamic Innovation Cycle is a realization (i.e., an epiphany) that myriad warning signs form a pattern, which provides growing clarity that disruptive change is on the horizon.
Figure 8.1 The Dynamic Innovation Cycle. (Source: Prsenl.)
Grief Cycle
The Five Stages of Grief, identified and made famous by Dr. Elizabeth Kubler-Ross,3 were originally developed to explain the behavior of patients facing a terminal diagnosis. This model has been borrowed and expanded to explain coping with grief in many guises. In this case, we borrow it to explain the grief of accepting disruptive changes in routines. Persistent change is debilitating, as are predictions of calamity. Both apply here. Dynamic change means that these five stages will reoccur over and over, so we call it the Grief Cycle.
2. Denial. Refusal to accept facts and reality is a common defense in the face of distressing conclusions and impacts. But delays that accompany denial compound neglected problems, delay change, constrain options, and raise costs. Less time on denial and delay means more time and resources for adaptation.
3. Anger. Loss of status quo, routines, even real economic loss generates anger, a natural defense mechanism humans experience when stressed or threatened. While anger can serve a constructive purpose in some cases, unfocused or blind anger is a destructive and damaging reaction to change.
4. Bargaining. With no improvement and exhaustion from anger, focus shifts to bargaining in the form of If/Then propositions… “If I can just have X (some more time to adjust, relief from my stress, etc.), Then I will be willing to reform, make changes, accept (my fate, this change, etc.).”
5. Depression. With previous gambits to avoid change proven consistently ineffective, Depression sets in and it seems as if one is at the bottom of a deep dark hole and there’s no way out. Helplessness gives way to paralyzing despair. “I am screwed, I am a victim and there is nothing I can do” …
6. Acceptance. With other options played out, acceptance of change ushers in a new world order to replace the old. But acceptance does nothing to obviate the loss of the old and the vacuum it creates. Something must be done. As we all know, “Nature abhors a vacuum.”
Mastery Cycle
Acceptance marks an end to the Grief Cycle, but it also opens a new beginning for the Mastery Cycle, which fills the vacuum with a new paradigm comprising the steps an individual or organization takes on gaining maturity and growing into a new paradigm. Progress through this cycle is subjective, with some moving through its natural steps much more rapidly than others.
7. Orientation. Stripped of old rules, the individual or organization is at first on shaky ground in the new, unfamiliar paradigm. It’s time to go back to school, in a way, to learn the new ways and new vocabulary and grow into the new paradigm.
8. Experimentation. In this exciting, but awkward stage, newfound skills are executed haltingly, mistakes and missteps abound. Experimentation provides room to learn lessons more thoroughly, to apply the general to the specifics of any situation. In organizations, experimentation takes form in Trials, providing opportunities for individual stakeholders to engage with utilities and corporations themselves mastering the stages of change, innovation, and adaptation.
9. Competency. As skills are mastered, those seeking to change gain a handle on what is necessary. They acquire their own toolbox, and master how to use their favorite tools for different situations.
10. Mastery. As hidden talents are developed, skills mastered, and experience logged, mastery begins to emerge within the new paradigm. In time, habits and routines even turn the formerly odd and new into the commonplace and normal.
11. Innovation. Moving beyond the commonplace, the master can begin to play with the rules; invent new and better ways; and innovate to create a unique personal style. The Innovation Stage is exciting: sharing, experimenting, turning new technologies, products, services, and business models into novel approaches.
Unease
12. Unease. Having gone from mastery to innovation, one hopes to spend time in this exciting stage to reap the benefits of all that hard work. But hints appear that show the environment is changing and that the conditions and rules that support mastery are disappearing. With a threat to one’s security and well-being growing, unease becomes the first signal that the cycle is completing itself and soon it will be time to repeat the process.
A key point to remember about this dynamic cycle is that it is not zero sum: each turn around the cycle imparts new skills and wisdom to the individual, organization, or society. With each turn, patterns become more obvious, stages more recognizable, and indeed, innovation skills more apparent, eventually, becoming habits. Experience brings pattern recognition, anticipation, and rapid progress through the Grief Cycle, perhaps even skipping it altogether in zeal to get to the Mastery Cycle and Orientation, where progress begins. Those who master this cycle become natural community leaders, their common enemy, the Grief Stages, which slow everyone down and inhibit successful adaptation to change.
4. Quintessential innovation (Q2i)
4.1. Data Analytics and Disruption
For utilities to execute the necessary changes to the grid ecosystem at the pace of change that consumers have come to demand in all other areas of the economy, they will need to emulate the success of innovative Internet companies with situational data analytics as the universal, fundamental core of the platforms that will emerge to foster innovation. Data analytics (of both operational and market data) and emerging innovative ideas will guide the automation required to transform the grid. For stakeholders to manage increasing complexity, such as 100% distributed solar energy, more and more innovation will be necessary. The current operating culture of utilities holds system reliability as a primary function, stressing routines over innovation. Situational data analytics supports strategies to both overcome conventional change inhibitions and stimulate homegrown innovation as it grows within the organization.
Incorporating data-driven innovation as a foundational platform, as shown in Fig. 8.2, is the secret to overcoming the Pace Problem. Such a platform will position innovation to drive waves of transformation like a virus through progressive maturity cycles. Iterative innovation, as described below, enables stakeholders (i.e., utilities, consumers, and vendors) to adapt to a new pace, tools, stakeholder roles, and business models.
Figure 8.2 Innovation Platform. (Source: Prsenl.)
Utilities enjoy such benefits as:
• grid modernization;
• distribution-based power;
• distribution feeder balancing;
• positive energy integration;
• strategic positioning of DER; and
• deferral of distribution system upgrades.
In turn, consumers see:
• a growth path to Prosumer;
• decarbonization;
• increasing innovation;
• ways to support grid modernization; and
• new revenue from positive energy.
Finally, vendors enjoy:
• new avenues to partnering with utilities;
• effective customer programs; and
• access to utility marketing efficiencies.
For utilities to embrace a new business model that enables expected technological changes, new operational models must be mastered, as further described below and elsewhere in this volume. But that’s not all: emerging markets and market data must join operations planning and protocols. Such an integrated operations/market platform will blend (1) utility IT and OT data with (2) third-party data (e.g., weather data), as well as (3) data about energy consumers and prosumers.
In short, the concept described henceforth, the Quintessential Innovation Platform (Q2i), becomes the means to harness data and situational analytics to foster data-driven iterative innovation. Q2i requires situational analytics software to provide a stable open data architecture that effectively connects the scores of incumbent software products used in regular utility operations.
The iterative innovation framework becomes the foundational key to a sustained transformation of the electric grid into a dynamic system that manages nearly infinite complexity by making flexibility and adaptability core elements of integrated system and market operations. Q2i describes five-stage innovation in two vertical and horizontal integrated platforms: the vertical platform enables a five-stage iterative data innovation cycle from data to innovation; and the horizontal platform enables a five-phase iterative business transformation cycle across progressive maturity stages, from planning to innovation. The sections below show how the Q2i platform enables an Energy App Economy to drive the pace required to keep up with an ever more dynamic economy and society.
4.2. The Iterative Data Innovation Cycle
The Iterative Data Innovation Cycle progresses in stages as the situation dictates, from Data Acquisition to Data Analytics to Insight to Action to Innovation and then back to repeat the cycle at a higher plane. In a dynamic world, the utility never really completes or exits this process, but makes becoming ever more innovative its principal core competency and business driver (Fig. 8.3).
1. Data Acquisition. Iterative Data Innovation begins with investment in a data acquisition system. A utility can’t transform without access to critical operational, third-party and market data.
Figure 8.3 The Iterative Data Innovation Cycle. (Source: Prsenl.)
2. Data Analytics. Data analytics combines multiple types of data and provides ready access to utility managers via well-designed user interfaces.
3. Insight. Adding value through experienced operational insights is the essence of situational data analytics and key to transformation.
4. Action. Shifting from good ideas and insights to putting them to the test requires action and integration of new technologies, helped by third-party participation.
5. Innovation. Analysis and insights from trials and pilots confirms or refutes hypotheses, underscoring the need for more data and new trials to hone understanding of new approaches and new capabilities.
4.3. The Iterative Business Transformation Cycle
As developed at Prsenl and shown in Fig. 8.4, a corresponding Iterative Business Transformation Cycle with its multiple iterations and experience moves across five maturity stages, from Planning (system planning) to Efficiency (efficient business processes) to Modernization (modernized grid technology integration) to Resiliency (system resiliency and DER integration) to Innovation (innovative transactive energy economy). The organization uses each step of the Iterative Data Innovation Cycle inside each maturity stage to become consistently more innovative as it adopts a variety of change activities moving through progressions. In both cycles, the utility uses steady and consistent iterations to mature and attain its vision of becoming an innovative, resilient company.
1. Planning. The essence of business transformation is sound planning; shifting from traditional department-level planning to holistic, integrated strategic planning.
Figure 8.4 The Iterative Business Transformation Cycle. (Source: Prsenl.)
2. Efficiency. The most rapid and easiest place to begin a business transformation is to identify and eliminate wasteful processes to become more efficient, typically in terms of process innovation/reform.
3. Modernization. More capital-intensive than efficiency, grid modernization channels Smart Grid ideas to embrace improved communications and enhance the acquisition of sensor data, enabling improved operations and greater flexibility. IT/OT integration and technology investment invite the collaboration of tech vendors to reimagine utility operations for new purposes.
4. Resiliency. Closely tied to DER integration, system resiliency considers system flexibility and adaptability. The secret to blending DER and centralized systems is to open the system to new ideas and participants by leveraging new DER capabilities to address operational conundrums like resiliency.
5. Innovation. The ultimate goal of a flexible, adaptive system is to promote, rather than react to change. Visions, such as a peer-to-peer transactive energy system and an energy Internet (i.e., eNet) suggest an evolved grid that operates as an efficient market enabler of innumerable energy consumers, producers, and prosumers to meet the goals of system resiliency, low cost, and highly reliable power, and low-to no-carbon emissions in a more open, efficient, and sustainable manner.
4.4. Quintessential Innovation for Electric Utilities: The Q2i Platform and Innovation Apps
The emerging Energy Innovation Market (described in more detail below and also throughout this book whose main theme is innovation) will draw on lessons learned from the emergence of the App Economy introduced by companies like Google, Apple, and Amazon. Platforms and Apps represent the ultimate consumer vehicle to incorporate innovations and enjoy improved customer value. The genius of the platform model is to invest in technology that supports near constant innovation offered in the form of modular services designed for specific market niches and specific problems, creating solutions that provide specific value (i.e., Apps).
The Q2i platform, shown in Fig. 8.5, is designed to enable this modular approach to accelerate problem solving by inviting utilities and third parties to share, and profit from, their innovations in the form of Apps. A current challenge for utilities suffering with the Pace Problem is the adherence to a service territory definition of the provisioning of commodity kWhs. Locked into relatively small markets, utilities have a small base on which to apply their innovations.
Figure 8.5 Quintessential Innovation: Q2i Platform and Apps Model for Utilities. (Source: Prsenl.)
The degree to which utilities are able to share their innovations in the form of apps will provide three essential solutions to the challenges introduced at the start of this chapter.
1. Time and Resources to Implement Change. The requirements to implement solutions will be dramatically reduced if utilities are able to adopt vetted, modular, specific solutions in the form of affordable apps, rather than develop and implement more expensive, slower custom solutions over and over again.
2. Monetization of Innovation. The ability to participate in the app revenue stream provides utilities with an alternative to rate-based revenue, a key objective of business transformation projects, now widely accepted among utility executives.
3. Motivation to Innovate. With the potential revenue component to offset the costs/risks associated with solution development, a utility will be encouraged to be ever more innovative.
5. The energy innovation market
5.1. Rising Prosumers
Consumers have a new relationship with electricity, driven in part by increasing outages, but also by new technologies that open up new avenues of independence. Electric utility ratepayers have traditionally been a dependent class with little access to information, little control over their electricity, and perhaps consequently, little interest in electricity except maybe in the amount of the utility bill they must pay each month, or on those occasions when the grid experiences an outage. In the developed world to date, outages have been short and rare, at least, that is, until recently.
Extended outages—days or weeks without electricity—have become more common over the past decade where extreme weather makes the grid vulnerable to disruption. And those consumers who can have begun to take steps to ensure power continuity in the event of a future loss of power. This newfound energy independence is not just tied to outages and storm-prone areas. Other consumers are looking into new approaches to energy, spending time on the web to learn how to conserve power by making changes to their home or building, for instance.
As energy consumers grow in power consciousness, they may begin to look at various appliances that consume power and replace them with Energy Star versions that consume much less (e.g., new refrigerators). Many are intrigued by the rows of now-affordable LEDs at the local hardware store, not to mention the growing interest in onsite power—the solar panels they see on neighboring rooftops—and electric vehicles. There’s a word for those who consume as well as produce power—prosumers.4
To mark this transformation from dependent ratepayers to consumers to prosumers, let us use the term Rising Prosumers, showing that ratepayers are on unique, individual journeys to energy independence. Rising Prosumers make up a new class of energy consumers, rapidly growing into a significant market segment with different expectations, different perspectives, and a growing appetite to take control of their energy destiny, perhaps not only to avoid outages or save money, but also to align their consumption with their personal values associated with climate change.
The Rising Prosumer represents new market needs, as more and more maturing consumers, actively engaged in seeking a more sophisticated perception of energy value, move beyond the commodity focus on monopoly dependency and $/kWh. As consumers shift to ever greater energy independence they represent a key challenge for electric utilities, namely, to redefine the nature of consumer engagement, a difficult task for monopoly utilities who have traditionally seen marketing as relatively one-dimensional, principally distributing information one-way out to their ratepayers via bill stuffers (analog), and websites and social networking applications (digital).
A recent study by Accenture5 examined the average time a consumer engages with a utility: “In 2016, the average customer of a regulated U.S. utility spent about 8 minutes interacting with their utility through digital channels and about 11 minutes with a representative. Half of all customers did not digitally interact with their energy provider at all.”6
5.2. Marketing Data: The Missing Link
As we move from monopolies to markets, the emerging Personal Energy sector will be comprised of multiple stakeholders, including:
• consumers maturing to become rising prosumers and associated communities;
• new DER vendors—solar power providers and their counterparts in the fields of Energy Efficiency, Demand Response, Energy Storage, EV Charging, and Microgrids;
• incumbent utilities, retail electric providers, and grid companies and associations; and
• governments at all levels.
As monopolies transition into markets with multiple stakeholders and relationships, it will be increasingly important to understand how the market functions and for that, much more marketing data will be needed. By focusing on data and a framework to (1) manage complexity; (2) channel innovation into transformation; and (3) accelerate the pace of change, the Q2i platform, now adapted for use by Rising Prosumers (Fig. 8.6) becomes the essential component of any company seeking to get more out of data analytics. By providing a practical means for a managed transition at the Rising Prosumer level, Q2i enables medium and long-term goals for the consumer and producer sides of the marketplace to come together. Industry transformation seeks a shared, repeatable format; Q2i helps avoid both the redundancy inherent in our fractured utility industry and the challenge of the Pace Problem.
Figure 8.6 Quintessential Innovation: the Q2i Platform applied to Rising Prosumers. (Source: Prsenl.)
6. Conclusions
This chapter began with a two-pronged challenge: ongoing and accelerating change and the threat of disruption to the historically stable electric industry. The remainder of the chapter engaged a progression through the challenge and proposed a framework for innovation as an answer to the challenge, as described below.
• Dynamic Change will impact all stakeholders in the energy ecosystem.
• The Pace Problem challenges bureaucracies and incumbents most of all.
• Energy Innovation is positioned as the answer to a more dynamic energy economy, providing greater value for customers and greater flexibility and adaptability for organizations of all kinds.
• The Dynamic Innovation Cycle helps individuals and organizations understand the means to adapt to ongoing, accelerating change and disruption.
• Platforms are a proven mechanism for making innovation a core competency of a new business model.
• The Quintessential Innovation (Q2i) platform comprises two parts: the Iterative Data Innovation Cycle and the Iterative Business Transformation Cycle.
• These two cycles combine to provide an individual or organization a practical means to mature into an acceptance of innovation as a core competency.
• The Q2i platform is adaptable to be used with apps to address the Pace Problem and to integrate the consumer and producer sides of the emerging Energy Innovation Market.
As shown in this chapter and throughout this book, the dynamic nature of change will continue to confound individuals and companies in our decarbonizing, digitally driven energy world. For those who seek to thrive in this new business climate, innovation offers a path to a new paradigm, but the path is loaded with constraints and obstacles, as shown in many chapters herein. This chapter suggests a particular strategy, a managed transition framework that leverages platforms and apps, which is a proven mechanism outside the energy industry. Adopting best practice in this manner points to new directions and new pathways to manage complexity and open up to new stakeholders in the evolving energy economy.
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