1. The Evolution of Enterprises in the Market – the Outline of the Process

1. The Evolution of Enterprises in the Market – the Outline of the Process

The problem of the digitalisation of firms is one of the multifaceted and multi-threaded issues which, in the context of the contemporary economy, based on knowledge and modern technologies, are an important and worthwhile discussion. In the literature on the subject, the term ‘digitalisation’ does not have one commonly used definition. In the narrow sense, digitalisation is the processing of analogue data into digital form, but in the broader sense, it is a multi-stage process: the identification and selection of documents (information, knowledge), their preparation and ordering, collecting basic metadata, digital conversion, quality control of copies and metadata, providing the user with access to digital documents, the maintenance of digital copies and metadata, backup copies and planning for the future. However, as it applies to firms, this concept is understood as the use of digital technologies related to the configuration of their business models to ensure new opportunities to generate value within the organisation.

For the traditional market, a specific dualism can be seen, which, however, is not reflected in the virtual market, which requires analysis in different categories. It should be mentioned here, that enterprises, which are market entities, have undergone a kind of evolution (Figure 1).

Figure 1.

Evolution of market entities. Own-study based on

^[1]

(pp. 21–22),

^[2]

,

^[3]

,

^[4]

(p. 33),

^[5]

,

^[6]

.

This evolution included successive stages, namely ^[1] (p. 21):

- starting with so-called “zero organisation”, based on simple reproduction (e.g., family farm of an “original” farmer or hunter);

- through the first-generation organisation, as a dual entity, functioning according to the firm- the environment principle;

- through second-generation firms, i.e., 2.0 (networked organisations), using in their operations collaborative technologies such as web services, P2P networking, collective intelligence, social networks, blogs, RSS feeds, wikis and mash-ups ^[2], ^[3], ^[4] (p. 33);

- ending with third-generation organisations (enterprise 3.0) in which so-called “empty entities” exist, both inside and in the environment of such entities. 3.0 Enterprises are based on a flow arrangement, i.e., ‘being in the flow’, where values for and from the customer are composed on the basis of the creation and annihilation (or at least slowing down of transfers) of information and knowledge flow ^[5][6].

As P. Depaoli, S. Za and E. Scornavacca^[7] indicate, “digital business solutions are commonly adopted with the goal of improving firms’ performance”. It results from the fact that investment in technologies is one of the key decisions in the context of enterprise strategic operations, transforming its organisational activities, as well as deeply penetrating its broadly understood competitiveness and development. Energy sector companies undergoing digitalisation are strategic entities in the economy, as the energy efficiency improvements occurring with their participation are part of the sustainable development policies of Europe and the world.

2. The Drivers of the Digitalisation in the Energy Sector Enterprises

2. The Drivers of the Digitalisation in the Energy Sector Enterprises

There are different drivers influencing the digitalisation of energy industry enterprises, among which one can distinguish those characteristics for this sector and those relating to all business entities, being a part of the more general phenomena of Industry 4.0 and Industry 5.0. A number of sector-specific drivers influence the pace, course and effects of these processes. They include different socio-economic conditions, related on the one hand to the increasing consumption of electricity by economies and societies, and—on the other hand—to shrinking conventional energy resources. They also result from the current energy policy in the European Union, which aims at decarbonising the economy, rising energy efficiency and increasing the share of production from renewable Energy sources. The digitalisation of energy companies can greatly facilitate adaptation to these requirements, representing a key factor for their rapid and efficient development, fostering the simultaneous achievement of the three priorities: the sustainability, energy security and competitiveness of the energy sector. Another sector-specific driver is the increasingly distributed nature of electricity production in the energy sector, in which the voice of prosumers, who want to gain greater control over energy management, use and production, is also increasingly heard. This is shifting more and more attention towards small, distributed, local and dynamic activities and businesses that are changing the fundamentals of the energy market. In parallel, energy sector companies are being impacted by other digitalisation drivers, which are also noticeable in other industries, and are therefore of a universal nature. They stem from the ongoing digital transformation of the business sector, which is a part of the more general phenomena of Industry 4.0 and Industry 5.0.

Both specific and general factors driving the development of the digital economy (digitalisation of activities) of energy sector enterprises as well as enterprises from other industries are presented in Table 1 (^[8] (pp. 21–23), ^[9], ^[10], ^[11]).

Table 1.

Specific and general factors in the digitalisation of energy enterprises.

Source: own-study based on

^[8]

(pp. 21–23),

^[9]

,

^[10]

,

^[11]

.

Digitalisation makes it possible to respond to all these challenges in both the supply and demand sides of the market. For energy suppliers, it offers higher system efficiency, the opportunity to make full use of data and implement new strategies and business models, while for consumers and prosumers, it offers comfort and a reduction in energy consumption costs.

3. Business Models in Energy Sector Enterprises in the Context of Digitalisation

3. Business Models in Energy Sector Enterprises in the Context of Digitalisation

Digitalisation in the energy sector is linked to the creation and use of computerized information and the processing of the huge amount of data that is generated along the energy supply chain. New digital technologies offer great opportunities to improve the efficiency of managing an advanced energy system: from infrastructure design, operation and maintenance, through energy production and transmission, to its consumption. Due to digitalisation in the energy sector, the necessary infrastructure and interfaces are

created that enable the efficient functioning of operators and the intelligent and effective implementation of the processes they support because it enables cheaper, faster and better monitoring using “smarter” networks^[12].

Global digital trends makes energy sector companies look for effective methods of competing, shaping and implementing new strategies and business models, using them to an increasing extent in various types of innovation and cooperation networks. The most important global digital trends affecting the energy sector and selected concepts of innovative business models corresponding to them, are presented in Figure 2.

Figure 2. The main digital trends and the most popular business models observed in the energy sector practice in the 21st century [^[12], ^[13], ^{[14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32]}.

Analysing the selected emerging innovations in business models in the energy sector as a result of digitalisation, it can be concluded that the boundary between supply and demand may be blurred in a digitised future. The deployment of smart grids, interconnected and interoperable energy trading and management systems, as well as the exploitation of the potential of artificial intelligence, blockchain and other digital technologies, can completely change the position and roles played by suppliers and consumers. New roles and new actors, such as prosumers or aggregators, are emerging in the transforming energy market, and the range of possibilities for their creation seems to be essentially limitless. As the review of research showed, the new business models being implemented in the energy sector encourage, on the one hand, large generators to transform their operations, including through the possibility to use RES, thus enabling them to adapt to the trends observed in the market, while, on the other hand, they support small prosumers in being active in the energy market, which encourages the active building of a demand-supply balance.

4. Challenges and Dilemmas of Energy Sector Enterprises Regarding Industry 4.0 and 5.0

4. Challenges and Dilemmas of Energy Sector Enterprises Regarding Industry 4.0 and 5.0

The digital transformation of the energy sector is part of the more general current phenomena of Industry 4.0 and Industry 5.0. Moreover, this process is a component of shaping the information society and the implementation of the global plan of sustainable development ^[33](pp. 283–294). The effects of digital transformation are shown in three projections: in the area of technology, business and culture ^[34]. Digitalisation affects the nature of the relationship between the above-mentioned areas (human–technology, human–business, and business–technology). The following opportunities offered by digital transformation can be listed:

- Increasing the efficiency, stability and security of the current energy system (application of mathematical models, digital twins, cloud solutions vs. hosting solutions, real-time control); increased precision in servicing systems and devices (3D-PLM-MES expertise); creating new forms of staff training (gamification, virtual and augmented reality technologies) ^[35], ^[36];

- Lowering operating costs (OPEX) and capital expenditure (CAPEX); introducing new business models and forms of distribution (Energy Aggregator, Internet of Energy, Distributed Energies Resources) to meet the requirements of local energy markets;

- Integration of systems based on different renewable energy sources, e.g., solar power grid control depending on atmospheric changes, optimal adjustment of consumption to the applicable local tariffs (big data, smart grid) ^[36], ^[37].

At the same time, the digitalisation of the energy sector is associated with new challenges and dilemmas such as:

1. Risk of instability of electric networks—due to the inexorable increase in Energy consumption, the decentralisation of its generation and the increase in the diversity of its sources, the risk of instability of electricity networks has increased, which was partly reflected in the winter blackout in Texas ^[38] and the summer blackout in Great Britain ^[39];
2. The need for close integration and information exchange within the Energy branch—new methods of electricity distribution require good information exchange between the individual elements of the energy system, matching and close cooperation between the producer, distributor and consumer of electricity ^[36];
3. Increased requirements for cybersecurity—along with the rapid increase in the numer of intellectual devices in automated systems and the exponential increase in the volume of information sent by them, the area susceptible to a possible attack by hackers has significantly expanded. Therefore, solutions guaranteeing digital security must reach a new qualitative level ^[36];
4. Increased requirements for the professional qualifications of operating personnel—in connection with the implementation of the new technologies mentioned above, the requirements for operating personnel (installation, tuning, scheduled maintenance, repairing) of power plants and other infrastructure in the energy sector are significantly increasing. Today, operating personnel must be familiar with technologies such as MAC address, IP address, VLAN, Cloud Computing control, IEC 61,850 protocol etc. ^[35];
5. Changing the thinking paradigm—a lack of trust in cloud computing infrastructure on the part of customers is still a frequent phenomenon. In their opinion, if something works well, there is no need to change it. The more so as new technologies cannot always secure the same level of security as provided by earlier, already-proven technologies and solutions ^[33] (pp. 283–294);
6. Anthropological dilemmas—digital technologies can significantly increase the stability of an energy company, allowing it to be controlled in real-time mode. Therefore, the time needed to adopt important decisions is significantly reduced. At the same time, there is a specific disproportion between the speed, complexity and scope of the changes taking place and human perceptive abilities limited by their natural properties as biological beings ^[36];
7. New forms of interaction with the service user—digital transformation has significantly changed the culture of communication between the distributor of energy and its user. This applies, inter alia, to ways of shaping flexible tariffs, and the need for clients to know digital technologies. Increasingly, the user is served without an assistant, which is replaced by chatbots. The latter solution, so far, works only in the performance of standard, non-complex tasks. In many cases, solving a problem or doubt requires talking to a person ^[40](pp. 189–194). In addition, very often the client’s need to get direct feedback from the assistant is still indispensable.

To a large extent, the above-mentioned dangers related to the digitalisation of the energy sphere are also specific to other areas of life where digital transformation takes place. Generally speaking, meeting new challenges and dilemmas is associated with finding a balanced dynamic relationship between the area of technology, business and culture, ensuring the free flow of information between these areas. Digital transformation should correspond closely to these concerns and offer concreto improvements in terms of stability, savings, convenience and security in the energy sector. In this context, this process is a crucial component of shaping the information society and the implementation of the global plan of sustainable development.