Disruptive innovation has always been a massive challenge for all businesses that laid the foundation for many industries. The energy sector is also revolutionizing with many different innovations, including artificial intelligence (AI), robotics, blockchain, energy storage, smart metering, and integrating grids for achieving environment-friendly goals by offering clean energy solutions. But first, let us understand what is meant by disruptive innovation!

What does disruptive innovation mean?

It is when a new market entrant has an innovative product designed to address a specific market niche. However, as the current market leaders are reluctant to innovate, the market consumers find the new product attractive and switch to it. As a result, this disruption caused due to innovation gains high market share to the new entrant. 

Now the question arises, why was Disruptive Innovation necessary? Well, everything happens for a reason. So let us first look into the reasons commonly leading to disruption in any sector.

Reasons for disruptive innovation:

Some of the core reasons behind the need for disruptive innovation are as follows!

• The current era is based on the technological advancement of every sector, resulting in the digitization of the power sector as well.
• Another major reason is the substitution of conventional energy sources for low carbon for nations to be self-sufficient with cheaper and easily available alternative sources.
• The entrance of entrepreneurs in the energy sector is also one of the reasons for disruptive innovation.

Certain factors show the cause-and-effect relationship with market players. This process can be defined with the help of the disruptive innovation Theory.

Disruptive Technology in Energy Sector

The disruptive innovation theory states how new inferior goods satisfy a niche market based on their innovative approach but has the potential to be generally accepted by other consumers, allowing them to disrupt the conventional market. Similarly, the energy sector has also been influenced by the technologically driven conservative method of power generation with the help of innovation. 

In the utility-based energy market, ensuring uninterrupted supply with minimum downtime and efficient load distribution is essential. Disruptive innovation technologies have effectively applied AI and machine learning algorithms to revolutionize the power sector. There are almost ten leading disruptive technologies in the energy sector. Let’s see the most important ones!

Renewable Energy

On the top of this list is renewable energy, the highest adopted innovative technology. The other disruptive technologies include the cloud, mobile devices, apps and commerce and the Internet of Things (IoT). Although renewable energy is a highly adopted technology, it also accompanies certain challenges.

Challenges of Renewable Energy

Economic factors play a vital role in the market demographics and acceptability of any innovative technology. So, what are those? Let’s see!

Demand outpacing supply

In the short term, it is expected that the production of renewable energy will go up. However, it is a challenge that demand will outnumber the supply to meet consumer needs at a certain point. Moreover, the affordability of materials and production costs will also contribute to the issue of meeting the demand. Therefore, the growth of green energy in the short term will also be affected.

Lack of Specialization

The lack of skilled staff is one of the biggest challenges when adopting and integrating innovative technology. As a result, outsourcing services or partnering with specialized persons or bodies can only result in the expected growth of the renewable energy market.

Regulatory Constraints

The power sector, unlike other industries, is more exposed to macro factors, including governmental influences. It may be in the form of policy changes and regulatory constraints. It acts as a challenge to achieve the goals of sustainable growth of renewable energy in the short as well as long run.

Customer Preferences

Customers’ preferences may change, similar to the acceptability of renewable energy in conventional energy production methods. As innovation is a continuous process, other green energy methods might be equally attractive to customers. As a result, consumers may switch to other disruptive technology.

Energy Storage and Power Utility

Innovative technology in batteries has resulted in a lower cost of Lithium-ion batteries with improved performance. This trend will help consumers switch to larger battery banks to build new power plants.

Internet of Things (IoT), Robotics and Connected Technologies

The Internet of Things (IoT) is the next-level industrial revolution in the energy sector. It helps manage asset performance, optimize operations and engage consumers to switch to lower energy costs. Smart meters and thermostats are the initial customer-oriented IoT applications already in use. IoT has the potential to transform the power sector significantly.

Benefits

Let’s have a look at the benefits offered!

• IoT and robotics applications are already being used in the power sector, especially on demand. As a result, consumers can now track and monitor their power consumption, helping them save money on electricity bills. 
• It has the potential to make an aggressive revolution in the aspects of energy generation and transmission. Once connected with IoT, it can ensure effective load balancing and perform load flow analysis. The system can also easily identify faulty transformers and send alerts to the team for timely maintenance.
• This technology has reshaped the power sector. The energy company leaders are also considering adopting these disruptive technologies to compete in the market. Moreover, the modernization of systems is essential to cope with the transformation in the sector!

Hence, disruptive innovation plays a strong role in the energy sector. These innovations came about as a result of a few entrepreneurs. So let us put some light on their contribution to transforming the energy sector towards conservative technology.

Role of Entrepreneurs in Disruptive Innovation

Entrepreneurs introduced disruptive innovation to cater for the niche market, but the idea had the potential to fulfil the needs of other consumers. The positive aspects of conservative technology made green energy possible, low impact on the environment and a high impact on societal well-being.

Conclusion

Disruptive innovation is essential for improving production methodologies that are not environment-friendly and are expensive. Moreover, the introduction of conservative power generation methods has resulted in clean energy solutions, which are more competitive and effective techniques for fulfilling customer needs. 

However, some challenges attached to certain innovative technologies cannot be ignored and imply that there are still some improvements to be made to these technological systems to ensure the long-term growth of the energy sector.