Transforming the utilities industry through tech disruptions

Technological disruptions are no longer a future threat for the utilities industry, but an impending reality. Set for an era of transformation, the resource-intensive industry is faced with rapidly advancing technology, disruptive digital innovations, and changed customer behaviour and expectations. The projection that renewable energy could account for 40 per cent of the global capacity in less than 10 years, coupled with aligned regulatory changes, also add to the evolving challenges. Operating on a business model that hasn’t fundamentally changed for the last century, the utilities industry is striving to redefine its role and learning to capitalise on new opportunities.According to MarketsandMarkets.com, the global digital utility market is expected to grow from an estimated $135 billion in 2017 to $244 billion by 2022. To keep up with the future, the utilities industry needs to go beyond optimising and reinvent itself; it must transform from a commodity-centric approach to a service-centric approach in order to take full advantage of new and emerging growth possibilities. To thrive in the digital ecosystem, the utilities industry must leverage technology disruptions to streamline processes and increase operational efficiency, drive customer engagement and enable transformational business models. Implemented across the entire value chain, the transition would also help the industry overcome legal and regulatory hurdles and create a competitive advantage.

Forging diverse partnerships, optimising as per the evolving power mix:

Rethinking strategies and business models, the industry must expand the scope of services and generate newer revenue streams. Adopting the role of energy services provider, the industry would create a broader partnership ecosystem, as opposed to competing with other industries. This would mean forging diverse partnerships with stakeholders in various industries such as consumer electronics companies, home monitoring companies, digital retailers, telecom providers, and specialised energy service companies, and transforming into orchestrators of a fluid ecosystem.

The rise of renewables, the decline of generation via traditional supply sources, and evolution of storage solutions, have given birth to an evolving power mix. The rising demand for nuclear and solar energy, as opposed to electricity generated from fossil fuels and hydroelectric power, highlight the need for a shift to cleaner and greener energy. Innovative and cost-effective storage options would function as a cushion between supply and demand, enabling greater room for variable renewable sources and enhancing the flexibility of the grid. With a change in the kind of energy users consume, the utilities industry will have to re-look at balancing demand and supply in an optimised manner.

Smart grid management and data-driven action:

A tighter demand-supply management and efficient connectivity between buyers and sellers, enabled by the changing storage solutions, is changing the way electricity grids operate. While the traditional ways of grid management volatility focused on fossil fuel back-up, the digital landscape requires new approaches to manage and deliver flexibility and promote a sharing economy. Additionally, disruptive technologies in the areas of transmission and distributed networks call for smarter grids and modernisation of enterprise applications.

Utilities must reduce resistance to implementation of grid management technologies, network and customer interfaces, and energy management technologies. The industry must also enable advanced geospatial platforms as a comprehensive approach for management of asset data. Smart devices and availability of big data can empower utilities to focus on an optimal distribution of resources and increasing overall operational efficiency. A platform level data solution, coupled with integrated operational intelligence, can help the industry unlock the immense potential of data-driven action.

New age consumers and the shifting focus to energy efficiency:

Technology and digital solutions are redefining customer expectations, preferences, and consumption behaviours across industries. Keeping pace, the utilities industry must leverage advanced technologies to enable multiple channels of engagement and reduce the overall cost of service. Automation, artificial intelligence, machine learning, blockchain and Internet of Things (IoT) are a few such technologies that are finding diverse applications in the domain. Adoption of cloud solutions could also help the industry ensure agility in the core billing and customer engagement platforms, thereby reducing capital expenditure.

In addition to enhanced and personalised service, new age consumers are starting to focus on energy efficiency and smart infrastructure. Non-utility companies and technology giants globally are already investing in smart homes and smart offices. These connected spaces will provide a seamless lifestyle experience to the customers while simultaneously empowering utilities to better manage and optimise energy resource distribution. A global roll-out of smart metering, combined with energy efficiency innovation in the manufacturing of electrical gadgets, equipment, machinery, and appliances is furthering the energy efficiency programme.

Regulatory bodies and governments around the world are making policy changes to ensure overall energy efficiency and a cleaner and greener environment, and the utilities industry must adapt accordingly. Primarily in the areas of energy efficiency, renewable adoption, carbon and greenhouse gas reduction, and smart metering, these changes will also force the industry to reinvent itself through a large-scale implementation of advanced technology solutions.

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