Disruption in the utility sector in 2017, from regulation to renewable sources of energy, will accelerate this year as leading utilities aggressively embrace digital transformation.
In 2018, utilities will ramp up this transformation to embrace new technologies that have the potential to redefine not only the technical landscape of enabling technologies, but, more importantly, prioritizing the user experience as a concrete and measurable goal.
Here are my four predictions for 2018 and beyond:
- The Grid Revolution
Digital grid architectures will be critical in integrating and managing disruptive power technologies such as renewables.
Through the utilization of two-way communication technologies, digital platforms will be critical in balancing grid-tied supply/demand resources across the value chain.
For example, digital platforms will be critical in managing generation spikes. Say a supply spike is caused by gusting winds at a wind turbine farm; a utility can activate battery storage assets, or trigger spot power market trading instructions. It can even alert customers involved in loyalty programs to take advantage of the excess generation.
The key to this capability is digital architectures that are real time and can manage and orchestrate optimization decisions in milliseconds.
- Perform or Pay
Digital platforms will serve as the innovation engines for utilities to thrive in a new Performance Based Regulatory (PBR) structure.
Regulators in the USA are evolving from favoring “cost of service” market structures to a Performance Based Regulatory (PBR) structure. The goal of the PBR structure is to provide incentives for utilities to accelerate operational and technical innovations, while delivering on measurable goals such as safety, environment, customer satisfaction, connections, social obligations and reliability/availability.
In order for utilities to thrive in this structure, their ability to innovate will become an increasingly important capability. The adoption of digital transformation initiatives are critical for utilities to integrate data sets across legacy applications, stream the data within analytical frameworks, and initiate automated event processes to drive greater safety, operational, customer and reliability outcomes.
- 3. IIoT Gets Smart
Smart and connected utilities will drive operational efficiencies to new heights.
The Industrial Internet of Things has made it possible for manufacturing and process-oriented industries to develop and deploy smart management concepts at asset, process and plant environments. Utilities will initially focus on predictive maintenance; this focus mirrors the adoption path experienced in both the manufacturing and process-oriented industries.
Once utilities deploy and harness the efficiencies associated with these initiatives, they will transition to more complicated initiatives, such as system wide supply/demand visibility that leverages Distributed Energy Resources for nodal balancing dispatch orders, an initiative that requires real-time complex algorithms and event processing to generate even greater benefits.
- From Ratepayer to Customer
Digital platforms will become a key enabler in driving utility customer experience and satisfaction.
In the old-fashioned regulatory construct, where competition was severely limited and customers were referred to as “ratepayers,” there was little concept of delightful customer experiences.
Fast forward to today in this industry and you will see that the customer experience is becoming increasingly valuable. There is a sense of urgency from utility executives to re -magine and deliver an outstanding user experience across all of their targeted customer segments.
The ability to improve the customer experience through the mapping of customer journeys by customer personas and channels of engagement will be critical to this capability. Digital platforms are not only key to the initial mapping and change management strategy, but will be critical as a core capability over time that allows utilities to continuously challenge and evolve their strategies.
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