From technical debt to digital power: 4 steps to a modern digital platform

The power industry is the backbone of the green shift, but technical debt is holding back innovation and the development of sustainable solutions. At the same time, the pressure to improve data exchange and adopt new digital solutions is increasing, according to a Cegal survey of the industry.

Cegal has asked several power producers and grid companies about the digital challenges they face. “Technical debt,” several companies answer, highlighting challenges related to older IT systems, outdated IT solutions, cumbersome user interfaces, manual processes, demanding updates, and the fact that individual systems are challenging to integrate with other IT systems.

• The power companies point to two main challenges related to technical debt:
• There is a need to modernize the professional applications.
• There is a need for better interaction between the IT systems.
• The power companies point to several reasons to modernize their IT portfolio and thereby get rid of technical debt:
• Older professional applications have compatibility challenges.
• Older IT systems require regular maintenance windows that cause downtime.
• Older IT solutions prevent efficiency gains.
• New IT systems provide better reports and dashboards, which can contribute to better decision-making.

Power companies see several positive effects as a result of more interaction between IT systems and better data and information flow:

• Access to public data in their systems provides a better basis for decision-making and more efficient processes.
• Modern IT systems that interact and exchange data streamline processes, provide a better basis for decision-making and provide a basis for better cooperation between players in the industry, authorities and other parties.
• It is difficult to share data between older professional applications, which results in many time-consuming manual processes with an increased risk of errors.
• Several players currently use artificial intelligence (AI), but to get good value, access to data, good data structure and data quality are required.

Read our blog post: Four major trends creating the perfect storm in the power industry >

The title “More of everything – faster”, the Energy Commission’s report from 2023, summarizes the authorities’ and the market’s demands on the power industry: power companies must, among other things, produce more, distribute more power, be more efficient and make both production, distribution and consumption more sustainable – and everything must happen faster. At the same time, many power companies lack the technological foundation to embark on the green shift, become more sustainable, and deliver the services that consumers and authorities expect the power industry to deliver. Technical debt is one of the obstacles to “More of everything – faster”.

Elhub: Technical debt pays off

The report "Elhub's value for society" states that "the establishment of Elhub, together with the rollout of smart electricity meters (AMS), is one of the largest digitization projects in the power sector in Norway over the past decade." "Elhub, together with the roll-out of AMS, has made it possible to provide consumers with prices that reflect the situation in the power system [which] enables resource scarcity and grid constraints to be solved at the lowest possible cost to society."

With the modernization of Elhub, a technological platform has been established that can serve as a solid foundation for the green transition and a more sustainable development of the power market and energy consumption. However, for this to happen, stakeholders must have systems and applications capable of exchanging data with the Elhub platform.

Read more about how Elhub's cloud migration has resulted in increased flexibility, faster development and lower IT costs >

At the same time, the report points to challenges related to technical debt: "The power system is now facing major challenges. There are many plans for new consumption, partly due to an ambitious climate policy. There will also be a lot of new power generation, which is largely weather-dependent and varies greatly. In many places, there are challenges with the capacity of the electricity grid."

The Elhub report also points out the biggest challenges with technical debt:

• It is challenging to make changes, correct errors, and develop new functions
• The APIs are old-fashioned, and this becomes a threshold for exploiting the opportunities in the platform
• The systems become unnecessarily complicated
• Operations, management, and further development become less efficient

"The technical debt accrues interest so that it becomes more and more demanding to improve or pay down the technical debt if no measures are taken (compound interest)," the Elhub report summarizes.

Four steps to modernize the IT platform

A successful modernization of the power companies' IT portfolios should follow these four steps:

1. Mapping existing systems – identifying what should be kept, upgraded, or replaced.
2. Developing cloud-based solutions – providing predictable costs, better performance, and flexibility.
3. Automating data management – ​​reducing manual processes, increasing data quality, and providing a better basis for decision-making.
4. Seamless integration between IT systems – establishing API-based solutions for efficient interaction between old and new systems.

By implementing such modernization, power companies will be better equipped to meet future digitalization, sustainability, and market change demands. Some of the effects are:

• Lower IT costs and better control over future IT costs.
• Increased operational efficiency through automation.
• Better decision-making with improved data flow and real-time insight.