The utility sector has learnt to cope with disruptive influences. Over the past ten years this has included industry deregulation, rapid demand growth and environmental challenges.
For utilities, digital transformation means greater customer contestability. Providers need to differentiate service levels via a range of value added deliverables – not just on competitive energy rates. Success in such a challenging environment requires a combination of efficient, customer-focused business models, supported by agile technology platforms.
However, many utilities have found it difficult to adapt and improve on their product offerings as quickly as consumers want. Conventional (business as usual) thinking and legacy business solutions contribute to the inertia. The more innovative ones (generally those with a growing millennial workforce), are winning the hearts and minds of consumers. They become more competitive and efficient, by embracing new business concepts and adaptive technology solutions that support rapid change.
The following are five key elements of digital transformation that have brought about positive change for utilities, and their customers.
- Internet of Things
- Everyone is talking about the Internet of Things (IoT). For utilities in particular, it represents a new reality.
- IoT offers powerful tools for the utilities sector. It enables granular visibility into hourly energy usage, remote management of network equipment and distribution automation.
- The vast amount of data that can be collected from internet-connected devices (e.g. sensors for monitoring the reliability of poles, cables and pipelines) can be used to enhance productivity and efficiency.
- Smart meters
- Smart meters are helping improve real-time decision making, solving critical problems and helping utilities develop new services / innovative experiences.
- There has been a significant increase in the number of smart meters installed in Australia/New Zealand. This enables real-time communication of energy data between customers and their service providers. Nearly 1.1 billion smart meters will be installed by 2023 worldwide (according to a report by Navigant Research). In New Zealand, over 55% of installations currently have smart metering. The majority of Victoria’s 2.8 million meters have been installed.
- While smart meters are becoming more widespread, the use of dynamic pricing (which matches energy supply and demand through real-time price changes), is not as prevalent. However, some utilities are emerging as leaders in applying dynamic pricing to better engage their customers and ensure system reliability.
- The reduced cost of automated meter reading has effectively lowered the remaining barrier to customer switching and hence, the contestable market.
- Smart grids
- Due to increasing global power consumption, coupled with challenges in the production of electricity, utility providers are expected to increasingly shift toward smart grid systems and their associated analytics-driven optimisation solutions in the coming years.
- Smarter utilities will look to network efficiencies and automation across the production and delivery spectrum and beyond, into the customer demand side.
- Smart grid technology, coupled with deep dive analytics will continue to open up new product options that provide customer value as well as optimising utility performance.
- Big data analytics
- There is a proliferation of data, but being smart with their data analytics and ensuring the data itself is of a sufficiently high quality is the challenge for utilities companies.
- Managing large streams of energy or water consumption data is fundamental to the future of the grid, as well as for helping consumers reduce their energy and water consumption.
- All of this data goes from the devices to the data centre, but by introducing sophisticated analytics, the more innovative utilities are able to see the valuable insights garnered. They can develop new processes to improve their services / competitiveness, and make them more efficient.
- Managing demand response for renewable energy supplies
- Fundamental changes in the power grid’s supply and demand profile, are requiring utilities to think creatively about how to manage this transition.
- On the supply side, significant investment in utility-scale renewable energy sources (like wind and solar) are bringing into question the intermittency of these sources.
- While on the demand side, the increased demand for electric cars, the most energy-sapping machines of all time, could put substantial pressure on the grid at certain times of the day.
What are the implications?
In isolation, none of these disruptive elements or their associated technologies are new to the utilities sector. The powerful message for the sector, is the need to invest in solutions that deliver the right outcomes in business efficiency, asset productivity and creates clear customer value. Process optimisation without analytics, analytics without quality data, and incomplete or obsolete data will all compromise progress.
Increasingly, we are seeing technology vendors innovate around families of solutions and technologies that provide a contextual framework for industry solutions - rather than technology components. We envisage that these new enterprise optimisation applications will grow into the business operations and performance space between the existing financial, client care and asset management solutions for utilities.
It is now becoming clear that company directors and boards are increasingly controlling ICT purchasing. This is true particularly in the areas of customer engagement and operational management, which are the more dynamic aspects of the business coping with disruption. While this focuses the role of technology in enabling better business, there is a risk that the architectural and lifecycle management guidance from ICT will be under-represented in these decisions. Decisions around technologies such as mobility, cloud-based solutions and insight-driven decision optimisation requires strong business and ICT direction. This avoids the costly and time-consuming mistakes of the last generation of ERP and IT investments.
How will your organisation adapt?
To help organisations adapt to market and organisational changes, Certus has created the Assets Insight Platform. The Certus Asset Insights Platform is a solution that modernises a client’s asset information management capability. It helps remove silos, barriers, and system interoperability issues to deliver a single view of your assets. The solution is designed to integrate all the key facets of modern asset management, in a modular and scalable way.
The Asset Insights Platform gives you a clear pathway to adding new services. Your organisation moves up the asset maturity curve as, and when, your business is ready. This provides a continuous roadmap, futureproofing your organisation by driving better value and outcomes.
With the platform in place, your organisation can harness sensor and real-time data via IoT sensors, gateways and edge analytics and prescribe actions and priorities based on observed and predictive insights.
Learn more about the Asset Insights Platform here.
To learn more about the Asset Insights Platform, download the Building Asset Intelligence ebook here.