At this year’s SAP for Energy and Utilities Conference (EUC) in Rotterdam, Netherlands, leading experts met to discuss current challenges and opportunities in the energy sector.
Daniela Haldy-Sellmann, global VP and head of Energy & Utilities Industries at SAP, spoke about key trends and the role of new technologies and gave her take on the future of the utilities sector.
Q: What do you see as the challenges and opportunities for the energy sector today?
A: In Germany and across Europe, we have a decentralized market in which a variety of players generate, transmit, distribute, and supply power. The challenge for energy suppliers is to make their pricing and services more attractive. So they are no longer just selling electricity or gas, they are also focusing on building customer loyalty and on fostering interaction between themselves and their customers. As for consumers, they want transparency about whether the electricity they are using really is “green,” and whether they can produce energy themselves—by installing solar panels, for example.
Energy suppliers are completely rethinking their offerings as a result, which is also putting pressure on their competitors to become true market leaders and to align their offerings with those of conventional retailers. On the distribution side, we are seeing how more and more energy is being generated outside the grid and then being fed into it—from smaller sources such as residential solar installations to large, new B2B plants. The energy market is in a period of disruption, which is inevitably affecting energy prices and driving the need for products and services that are viable in the long term. With energy providers’ profit margins shrinking dramatically, additional energy services will become their main source of income.
Decentralization was one of the major talking points at the conference. In that context, could you explain what “distributed energy resources” are?
Traditionally, our energy has been generated in large, centralized power plants and sent—in one direction, via a transmission system operator and distribution system operator—to consumers. In the future, the flow of energy will be bidirectional, because now, in addition to large conventional generation plants and a growing number of sustainable alternatives such as onshore and offshore wind parks and solar parks, we also have consumers who produce their own energy and feed it into the grid. Distributed energy resources (DER) refers to the assets that consumers and businesses have for generating power and distributing it through a grid that, in the future, will allow that energy to flow in two directions rather than one.
How does SAP help suppliers manage distributed energy resources?
Our enterprise resource planning (ERP) system can already cover all of a company’s core processes. For transmission and distribution system operators, that means all of their network assets, including power grids, generation plants, and substations, right up to the point of consumption. What we at SAP are now doing is providing transparency for meter operators, grid operators, and energy providers about the systems and devices consumers have installed in their homes. This data used to be highly unstructured. Now, thanks to our measurement concept management component, energy providers can map data for consumers who have an EV charger, solar panels, battery storage, or a heat pump, and use it to plan their capacity. They know, for instance, how much power a solar installation generates and what its maximum capacity is. So when a surplus occurs, they can remove any excess power from the grid or, in the event of a shortage, have their customers feed more energy into it. Depending on the scenario, the SAP software can analyze meter data from the cloud, format it, and make it available. Energy providers integrate this data into their DER platform to provide transparency about consumption and to allow an appropriate level of control over the power entering and leaving the grid.
Which solutions does SAP offer for managing sustainability goals and compliance?
SAP’s sustainability portfolio is extensive. It provides answers to questions such as “What are my supply chain emissions?” and “What emissions does a specific product I supply or manufacture produce?” Having this information means that, first, companies have proof for an auditor of the precise emission values per product. And second, that they can track those emissions to see, for example, how the values change. They can show that they use various technologies, that their products meet all the current environmental, social, and governance (ESG) standards, and that they can prepare not only consolidated financial statements but consolidated emissions reports as well. Here, SAP offers SAP Sustainability Control Tower and SAP Sustainability Footprint Management. Then we have the SAP Green Token solution and SAP Green Ledger, which aligns carbon and financial data.
Did SAP present a use case at the conference?
Yes. We presented the Energy Dashboard, which can show me exactly how much energy is being generated overall, how much I am producing, and how I can use it. Whether you’re a consumer, an energy provider, or a transmission system operator, you want an accurate picture of how much energy you have available, or need, to keep the power supply in the area or region you cover stable—because that’s what matters most.
What is SAP’s strategy for utilities?
We help our customers migrate from their existing SAP ERP Central Component (SAP ECC) and SAP S/4HANA IS-U systems to a cloud-based RISE with SAP landscape to help ensure that they have a consistent data layout. The standardized digital core with SAP S/4HANA is complemented by flexible cloud solutions for customer management and more.
The transition in the energy industry is also about shifting toward a greater reliance on renewable energy, phasing out fossil fuels, and helping companies in the sector diversify their product and service portfolios. We are seeing, for example, more and more oil and gas companies expanding into biodiesel and other biofuels. We’re seeing new carbon capture technologies emerge and huge investments in hydrogen, though these need to increase dramatically. And that is exactly what SAP’s strategy is designed to support by providing an application landscape with a clean core model in which the latest innovations can be readily adopted.
What excites you the most about working at the intersection of technology, sustainability, and the utility industry?
I’ve had jobs in many different industries, including automotive, manufacturing, high tech, and healthcare. But the energy sector is where I see the most collaboration and the most disruption. If you look at the net-zero and carbon-neutral targets that we need to achieve in Germany, Europe, and worldwide, and at the money being poured into renewables and green bonds, this is an industry with enormous opportunities for growth and investment. Technology is the backbone of everything, and we at SAP are contributing to the energy transition not only by simplifying processes for consumers, but also by developing technologies that fundamentally change the options that are open to them.
