The power of the digital economy

The power of the digital economy

Digitalisation is a great opportunity both for the electricity sector and for development that is based on sustainability. These topics were discussed at the St. Petersburg International Economic Forum, where speakers included high-profile figures such as António Guterres, Vladimir Putin, Xi Jinping and Enel CEO and General Manager, Francesco Starace.

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Digital technologies can turbocharge sustainable development. Making this claim was António Guterres, Secretary-General of the United Nations, speaking at the St. Petersburg International Economic Forum (SPIEF). This event, which was founded in 1997, has become a key date in the calendar for the global economy.

Attending this year were some of the world’s heads of state, including Russian president Vladimir Putin and his Chinese counterpart Xi Jinping, who stressed the importance of digitalisation as one of the crucial factors for international cooperation.

 

From digital to full cloud

The digital economy is already a reality, and it is sure to play an even more important role in the future. In the next five years, digital platforms are set to make up 5% of Standard & Poor’s “Top 500” companies, while representing 50% of net profits.

Within this scenario the companies that produce and sell energy will also assume new features. SPIEF held a round table about this very topic with the discussion “A Strategic Pathway for Energy Companies in the Platform Economy,” which saw the participation of Enel CEO Francesco Starace. Starace stressed the importance of digitalisation as a strategic and indispensable element for utilities, while pointing out the pioneering role of our Group, which installed a record-breaking 32 million electronic meters between 2001 and 2005. The Enel CEO went on to outline how second-generation smart meters enable a bidirectional flow of information: for instance, customers’ electrical appliances can receive real-time forecasts of electricity prices over the coming hours and thus their usage can be automatically programmed to take place at the most opportune time. This example also shows the benefits of digitalisation for consumers.

For Starace, however, today digitalisation cannot ignore the cloud model: Enel embarked on a journey in this direction three years ago and the Group has now reached a “full cloud scenario. This has opened up “a world of opportunities” and, as Starace stressed, not least among these is greater IT security. A company that is “full cloud” can also enjoy significant commercial advantages: for example, using statistical algorithms it can identify sample groups of customers who, based on certain parameters that were not previously predictable, have a greater likelihood of changing supplier in the short term. This enables the utility to act in advance in such a way as to prevent such an outcome.

 

Digitalisation and sustainability

The digital economy also offers further benefits to companies in the electricity sector since it is in fact powered by electricity; this point was emphasised by Marianne Laigneau, Group Senior Executive Vice President in Charge of the International Division at EDF. Consequently, the digitalisation of the economy will also help reduce greenhouse gas emissions.

Sustainable development was in fact one of the main topics at the heart of the SPIEF debates this year, in particular at the round table “Are Global Climate Challenges Restricting or Driving Development?” which involved Simone Mori, the Enel Group’s Head of Europe and Euro-Mediterranean Affairs. Speaking about the link between digitalisation and sustainability, Mori explained how the digitalisation of electricity networks represents an essential tool for increasing the contribution of electricity produced by renewables. Mori went on to remind the audience of the Enel Group’s presence in Russia, for example with the opening of the Enel Innovation Hub in Skolkovo, Moscow.

The discussion panel in which Francesco Starace took part also provided ample space for debate about the situation in Russia. In attendance were some very high-level exponents from both the business world and Russian institutions, such as: Pavel Gontarev, Managing Director of Mail.ru. Digital Technology, Alexander Povalko, CEO of RVC, Pavel Livinsky, Director General of Rosseti, Yuri Manevich, Deputy Minister of Energy, and Alexey Sokolov, Deputy Minister of Digital Development, Communications and Mass Media. The discussion revealed some notable similarities with the European context, in particular concerning the importance of IT security and international cooperation. In other spheres, however, Russia needs to up its game. For example, Christoph Frei, CEO of the World Energy Council and chair of the discussion, pointed out that as far as digital competitiveness is concerned, Russia is ranked a lowly 42nd place worldwide. This disparity needs to be overcome with technological innovation but also through a more favourable regulatory framework. Indeed, as Vladimir Putin said in his speech, new digital technologies will open up new horizons to those open to change.

What we are building today, however, is the future. When in a decade’s time we look back, we’ll regard digitalisation as one of the most revolutionary innovations of our times.

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