Meet the Energy Industry’s New Partners in Innovation and Digital Transformation: Their Customers
Of the many disruptions currently affecting the energy industry, shifts in the behavior and expectations of consumers are leading the biggest changes on the horizon. In fact, that disruption is already underway.
Decentralization and Collaboration: A new business model for utilities emerges
In many markets, utilities have been monopoly players until comparatively recently. It was a straight forward business model. Utilities provided customers with the energy they needed and in return utilities maintained the necessary infrastructure to keep the lights on.
Customers are now leading innovation in the power sector both to save money and save the environment. It is consumers who are driving change in energy technology.
There is a new model emerging - a decentralized and collaborative one. To succeed, utilities must transform into the organizations that today’s (and tomorrow’s) customers need and want.
Utilities have a key strength that makes them well placed to get closer to their customers and to become valuable ecosystem partners – the huge quantities of data they hold.
Energy Technology Consumerization and the rise of Prosumers
Energy technology developed for adoption directly by consumers, such as smart thermostats, rooftop photovoltaic (PV) systems and Electric Vehicle (EV) charging at home has largely developed outside traditional energy companies. Both the purchase and installation of these technologies are taken away from utility companies’ control. They are purchased and installed by both innovative startups and large players from other sectors. These companies are building energy ecosystems with consumers, independently of utilities.
Technology consumerization in the energy industry is powering the rise of the prosumer - consumers who are also energy producers, usually in the form of roof-top PV systems. Groups of prosumers are also banding together to produce, store and sell excess electricity locally.
In Australia it is estimated that 45% of electricity will be generated by prosumers by 2050. As this trend continues, utilities are faced with the prospect of fewer customers covering the costs of expensive infrastructure.
Consumers are pushing for a different and more involved role in the energy sector and electricity utilities must find a new place in their customers’ lives.
Utility leaders are aware that change is needed. In a recent survey of utility executives, 86% of respondents listed improving the customer experience as a top business priority.
So, what does this mean for utilities in practical terms? Here are three steps we think utilities must make to succeed in the future.
1. Become part of customers’ energy ecosystems
The closer they are to their customers, the better placed utilities are to develop more targeted services that improve customer experience.
Data from connected devices, once paired with Artificial Intelligence and data analytics, form a powerful combination, enabling utilities to develop highly personalized energy packages and services. This also enables consumers to actively monitor and control their own energy consumption and sources of energy via mobile apps.
The future role of utilities will be as lifestyle provider. Rather than being offered a power tariff, the new generation of consumers want to buy convenience. They will buy 100km of eMobility or 21 degrees of comfort in their home. Perhaps we’ll even see a new energy model where customers are offered periods of unlimited energy in return for their data.
2. Collaborate to accelerate Digital Transformation
Collaboration demands better integration. Energy technology consumerization and prosumers both pose integration challenges and volatility on the distribution network for utilities. Utilities must foster a distributed model of organization with improved integration to Distributed Energy Resources (DERs).
Integration to DERs offers energy utilities opportunities for modernization and innovation. One example of this is the New York Power Authority who are rolling out EV charging stations and integrating PV systems across New York State.
Power companies must find ways to become part of consumer’s energy technology ecosystems. This means working with companies supplying home energy technology, including large technology mega-vendors, electric car manufacturers, charge point operators, carpark owners and even competitors. However, this brings interoperability challenges. Tapping into smart home APIs and home digital assistants is a way to address these challenges.
The increase in connected consumer technologies producing real-time data, calls for better integration of operational technologies with IT. Improved integration enables better visibility and improved customer service. It allows utilities to plan grid investment strategies as well as take a proactive approach to any power supply issues through automated resolution processes, making it easier for utilities to keep consumers informed.
Electric vehicle charging, DERs, microgrids and Smart Meters all rely on the Low Voltage grid. Currently data from this part of the grid is largely an untapped resource. With more intermittent energy flow originating from renewables, combined with the rise of consumer energy technology, visibility is increasingly important. Improved integration of data from the Low Voltage grid can only become more important to the efficient running of utilities and increased customer-focused innovation.
3. Putting Data at the heart of Energy Utilities
The new decentralized, collaborative energy sector will rely heavily on data. Utilities can put themselves in the center of this ecosystem by positioning themselves as an energy data service and lifestyle provider. Utilities are uniquely positioned to become the platform for the future of digital services, even in a smart city context by enabling data integration wherever it is needed to its own systems and other third-parties or ecosystem partners. Each integration adds a new layer of detail to the picture, enabling the formation of new market places and service innovations.
With greater access to increasing amounts of data in the energy sector, utilities and third-party companies can continuously improve the user experience. Energy consumption data is of primary importance to all players in the energy ecosystem, helping to place utilities in a central role in the network.
A Digital Integration Hub enables utilities to overcome the integration challenges that many utilities face today. It also enables them to make full use of their data and turbocharge their API strategy. A domain specific Digital Integration enables utilities to provide the services required by customers and transforms utilities into thriving organizations for the future.
Greenbird offers out-of-the-box system integration for utilities. We are a true DevOps company, delivering unique time-to-market and reliability. We were named a Gartner ‘Cool Vendor’ in 2018 because of our domain specific and flexible integration capabilities, crucial for creating easy-to-consume integrated solutions. Utilihive empowers utilities to manage their data flow faster and smoother than traditional system integration models while accelerating the journey towards the energy revolution. To learn how you can unleash the value of data while removing silos click here and request your copy of the Utilihive executive brief.
