The consumption and production of sustainable and “green” energy continues to gain progress toward achieving ubiquitous status, with today’s consumer expecting a reduced environmental footprint. In addition, the customer also expects seamless services and ease of use to improve their quality of life through digitized processes, giving them complete control over every aspect of their lives. A popular projection expects us to see somewhere between 20-30 billion devices connected by 2020—from cars and appliances to lights and temperature control. All these functions will be connected through an interoperable network that gives consumers complete autonomy over controlling and choosing their energy utilization.
The hype surrounding these projections further reflects how energy itself is becoming more sustainable. According to a report from Bloomberg New Energy Finance, 72 percent of total new power generation capacity investment globally, will attribute toward renewable energy by 2040, with the falling costs of residential renewable energy disrupting the utility company/customer relationship. This form of decentralization is changing consumers into prosumers, who are generating and managing their energy usage sustainably and conveniently.
The energy meter has historically been the centerpiece of utility company’s relationship with consumers. The contract is formatted with the customer to provide energy, with the meter being read to determine how much was used. The consumer is then billed by the utility company based on their energy use. Unless something like a billing issue or outage prompts the user to contact their energy provider, a bill is the utility company’s only touchpoint. The rise of smart metering systems, powerful technology platforms, and tailored software that incorporate advanced analytics, big data, machine learning, and AI is evolving these interactions. Energy utilities can now continuously collect and analyze smart meter, SCADA system, and sensor data that determine and monitor the health of infrastructural assets, which creates new opportunities to reinvent business processes and models.
In the past, asset providers had their own system producing their own set of analytics, but can now collect all data from each asset into one IoT platform in (almost) real-time. This advanced capability can also be linked with enabling utilities to proactively manage key assets within its value chain. This in turn can lower maintenance costs and optimize customer satisfaction through an uninterrupted power supply. Gaining real-time visibility of consumption behavior not only further empowers energy consumers, but also enables better energy management at a business of household level. This type of benchmarking can also be enabled in a smart city environment, which can provide insight for energy consumers, into their neighbor’s energy usage, along with a neighborhood, city, and (potentially) on a national scale. When energy level consumption exceeds supply, utilities can better communicate with major users and provide incentive to cut consumption rates.
Over the past century, there have been three major disruptors currently changing utility companies. One of them is decentralization, which is affecting where energy is created and how it is consumed. Elon Musk’s Solar City for example, will feature renewable solar roofing tiles that generate electricity at the local level. Reregulation is allowing a new breed of disruptive competitors to enter the market. This has led to the development of new services like the broad range of home energy monitoring, control devices, and applications being aimed at customers. Lastly, decarbonication is driving the adoption of non-fossil fuel energy sources. These disruptors are paving way to the rise of off-grid consumers—businesses and individuals who generate their own energy through renewable sources.
Aside from the notable revenue loss, these particular consumers pose a risk through their potential to sell surplus energy to their neighbors that would further divert the revenue stream of an energy utility. Utility companies must prioritize a process of digital transformation that not only reimagines their business models, but reengineers business processes. Embracing technologies like Blockchain, machine learning, predictive analytics, big data, and the IoT along with integrating everything into a cloud platform can enable energy utilities to fast-track digital transformation, and rapidly adopt new business models, and capabilities.
