The Intelligent Utility: Four Ways Forward

Patrick Fitzgerald

The energy utilities sector has immense responsibility to provide a safe and secure infrastructure for the world’s well-being. Looking forward, the stakes get even higher.

Click here to register for the SAP Industry Forum 2020 UtilitiesWith the global mandate to reduce carbon and the rise of renewable energy sources, electricity providers must cope with the new challenges of balancing supply and demand. They must accommodate customers’ energy preferences; embrace the cultural, technical, and environmental changes that are disrupting energy utilities; and be mindful of regulatory oversight.

A world of rapid technological change – distributed energy resources, micro-generation, batteries, microgrids, and electrical mobility – and social media adoption are forcing electricity providers to rethink the way they work, the services they provide, and the business models they follow. Energy utilities are all getting on the road to becoming intelligent enterprises.

To reach their destination, they are focusing on the following strategic priorities.

Distributed energy-resource operations

Today, smart solutions allow consumers of all types to interact with the energy system by making their demand more flexible. In the electricity system of the future, consumers will be able to produce their own energy through renewable sources, thus drastically changing their relationship with energy utilities. Sensors and meters attached to power-consumption or power-generation devices will allow transparency and aid in managing capacity automatically.

Today, utilities should focus on gaining a 360-degree understanding of both business-to-consumer (B2C) and business-to-business (B2B) customers. Increasingly, utilities will analyze technical, consumption, and experience data to better determine the needs of residential customers. They will help commercial and industrial customers to avoid costly energy peaks. And they’ll optimize energy streams by detecting flexibilities that can either be intelligently re-dispatched or traded when economically feasible.

Smart and efficient distribution

Moving forward, distribution grids will be equipped with sensors similar to today’s transportation grids. Utilities will use smarter asset management with fully digital allocation of spare parts, work, and logistics services. Smart asset operation and maintenance will ensure cost-efficient, compliant, and safe power distribution.

Intelligent software will connect the distribution grid and bring together information from operational and business systems. Together, the granular data from sensors, the maintenance history of the assets, the consumption data provided by smart meters, and the experience data from customers, employees, and suppliers will provide real-time insights into the health of the grid. This result will be unprecedented visibility and control – allowing utilities to optimize processes and deliver better service.

Demand and supply balancing services

As decentralized power generation (solar, wind) increasingly becomes the primary source for overall energy production, utilities will need real-time access to the data these entities generate to manage overall grid balance and stability.

Thus, utilities are now equipping residential customers with smart-meter technologies. Such smart meters are forming a digital energy network that supports the bidirectional data transfer needed to optimize the grid and effectively balance demand and supply.

Once a digital energy network is in place, real-time energy settlement calculations can be executed flexibly. Moreover, customers will participate in load-shifting programs to help reduce their overall energy usage, and all market participants will support grid stability.

Omnichannel retail to digitalized consumers

Increased decentralization requires that utilities move from the traditional one-directional customer relationship to a cooperative “prosumer” model, where consumers both generate and consume electricity. As a result, utilities will need to store and manage electricity coming from outside their domain and act as an energy marketplace rather than as a simple provider.

To get there, energy utilities must transform to offset shrinking margins in the commodity business. To do so, they should intelligently introduce new business models, products, and services within a distributed energy-resource marketplace and increase customer engagement with new experiences. By enhancing the digital experience with personalized interactions and insights across all channels and interaction points, utilities can successfully shift the relationship paradigm from ratepayer to customer.

The future is bright

Utilities that embrace intelligent technologies and the intelligent enterprise paradigm will be the ones most responsive to the opportunities presented by energy transition and new customer demands. The change required will take coordinated effort, but for organizations that can navigate the road ahead, the future is bright.

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Patrick Fitzgerald

About Patrick Fitzgerald

Patrick Fitzgerald heads up Saltbox Communications, a technology marketing shop serving the enterprise software industry. For more than 18 years, he has worked with SAP as an independent communicator focusing on the business and technology challenges that organizations across a wide range of industries face as they pursue digital transformation.