Digital Transformation in the Energy Sector

By Joe Locandro, Chief Digital and Business Transformation Officer, Australian Energy Market Operator

Joe Locandro, Chief Digital and Business Transformation Officer, Australian Energy Market Operator

In the global landscape, few industries have undergone as much technological change as the energy sector. International climate targets, new generation technologies, and changing consumer behaviours have driven a transformation we haven’t seen since the industrial revolution. As the chief digital and business transformation officer for the Australian Energy Market Operator (AEMO), I would argue that I have one of the best seats in the house to help lead this exciting transformation. Many of the challenges we see in Australia are highly unique to our isolated landscape, however, as the world collectively transitions to a lower-carbon future, the insights we gain from solving these challenges will be equally applicable for our international counterparts. This transformation offers us many opportunities to redesign our energy system to improve our energy efficiency, drive down costs, and ultimately benefit consumers. Given the speed of technology advancements happening in Australia’s energy space, AEMO is moving aggressively in the digital world to take advantage of these new opportunities and will be using them to improve how we operate the energy sector more efficiently.

The first, and perhaps most significant development we have made, is the launch of AEMO’s Digital Strategy. This strategy will serve as a strategic blueprint for our digital operations and allow us to deliver new platforms and services with frictionless, secure, and scalable digital experiences for our stakeholders. Grasping the benefits of a digital world will enable AEMO to continue to deliver operational excellence in our core functions of forecasting, electrical engineering, and grid operations management.

The use of big data, as well as having flexible and adaptive technology platforms, also allows AEMO to continue to drive innovations in the existing and emerging energy markets. It will provide easier access to the grid to our new market participants through streamlined, web-enabled interfaces, while allowing easier access to near real-time data and reports that have been curated and cleansed by artificial intelligence and machine-based learning. We will continue to unlock and add value to the immense amount of data our systems produce daily.

Another major part of this digital strategy is our focus on cyber security. As the world evolves to a more two-way, digitized energy system, the need for more sophisticated cyber security tools and defences will increase. To mitigate the risks associated with this new environment, we have already begun uplifting our internal operations, upskilling our employees on cyber security issues, and educating them on how they can mitigate risks in their early stages. We have also worked closely with Australia’s state and federal governments to help inform future law reform in Australia’s energy sector and collaborated with adjacent industry bodies to publish the Australian Energy Sector Cyber Security Framework. This evolving framework will continue to review national and international approaches to cyber security, and map out best way forward for Australia’s cyber security operations.

Outside of AEMO, the evolution of new and existing technologies will continue to improve our capabilities as a market operator. One of the most significant advancements is the rollout of 5G communication technology, which will open a suite of possibilities for both AEMO and energy users. From our perspective, 5G technology means increasing the amount of high-quality data that can be feed into our systems to deliver real-time, accurate analysis on our systems operational security. With the advent of the Internet of Things (IoT) and sensor technology, more granular data can be transmitted via these 5G SIM cards into the cloud. From a consumer perspective, this technology means Australians will soon be able to monitor their own energy usage with greater insight and accuracy. Using their tablet or mobile devices, consumers will soon be able to watch anything from how much power their solar panels are producing, to the live storage levels in their home battery device. The increased number of sensors able to connect to this 5G network will also underpin the ongoing advancement of the IoT, meaning that energy users will one day see their everyday appliances learn and optimise their own energy usage, ultimately driving down their operational costs.

Satellite advancements are also producing improvements in geospatial technologies, which have already delivered material benefits to our forecasting capabilities. Current satellite imagery can now give us near real-time feedback into weather patterns, allowing us to monitor the movements of clouds and dust storms, and predict how they will impact our rising amounts of rooftop and grid-scale solar. This also means that we will have access to large amounts of inference data, which can then be collated and fed into artificially intelligent systems to provide insights on where future infrastructure and developments will deliver the most benefits to our systems and its users.

The fast-moving technology changes in this new digital world, both in our internal and external environment, means it is an incredibly exciting time to be a part of Australia’s energy sector. The rapid uptake of renewable technologies coupled with Australia’s uniquely large and isolated environment means that AEMO is well-positioned to become a leading voice in solving these critical technical challenges. Underpinning all this change is the need for a robust and flexible digital system that can support, facilitate, and advance our capabilities as a market operator. While the road ahead may be long, I am excited to see how we can work together to shape a better energy landscape for generations to come.