The Digitalisation of Energy in Energy

Overview

IP Development & Licensing

Key issues

Innovation: this must accelerate to meet clean energy targets. Government support and programs are incentivising this; currently most is in end-use sectors (eg. EVs) and enabling technologies (eg. batteries, hydrogen and carbon-capture, utilisation and storage).

Barriers to entry: in many cases these will be lowered as assets become smaller, distributed and connected. Conduct thorough due diligence not just on a target’s IP portfolio, but also its practices for identifying, protecting and enforcing IP rights and ensuring it is not infringing third party IP rights.

Patent filings: ensure your own innovations do not infringe existing patents by conducting freedom to operate searches and obtaining clearance advice.

IP protection: have strategies to identify and protect the outcomes of R&D, and then monitor for and act on infringing activities.

Licensing arrangements: license-in core technology requires due diligence, and careful negotiation to ensure you receive the rights and commercial protections.

Rebranding: business transformation is often coupled with rebranding. Conduct clearance searches to see if a brand is available, and use trade mark protection.

Technology Procurement

Key issues

New technology for energy transition: this is increasingly being provided “as a service”, which brings both benefits and risks, so robust contracts and internal processes are needed.

Five minute settlements: trading and settlement arrangements designed for coal fired power have been superseded. New fast-response renewable and battery technologies are facilitated and incentivised by the national energy market's move to 5 minute settlement, based on faster metering and data processing technologies.

Getting new technology right: implementation that creates commercial benefits, but avoids escalating costs, poor system quality or performance, damaged employee and stakeholder relationships, disputes, regulatory prosecution and adverse PR.

Contractual arrangements: when planning, drafting and negotiating IT contracts look at scope and price uncertainty, supplier "lockin", business continuity risks, data sovereignty and security, incentives for supplier performance, catering for change and unexpected events, and risk allocation. Understanding suppliers’ objectives, drivers and approaches to drive contract terms in your favour.

Data & Cyber Security

Key issues

Data: increasing data collection, analysis and sharing to plan and manage activities including energy generation and consumption, promoting energy efficient products and providing innovative commercial offerings.

Cyber security: operators of “critical” energy assets under the Security of Critical Infrastructure Act must provide details of critical assets, report cyber security incidents, and allow government to provide “assistance” (potentially taking control) in some cases. There are enhanced obligations for energy assets declared a System of National Significance.

Consumer data: privacy reform is likely in 2023 to increase fines substantially and allow civil actions (including class actions) for privacy breaches. The Consumer Data Right is rolling out in the energy sector, giving consumers greater control over their data, including the right to transfer it between energy retailers.

Supply contracts: cyber security terms are becoming increasingly sophisticated and are regularly negotiated. IT suppliers are introducing “super-caps” or exclusions for some cyber liabilities.