In addition to triggering a new round of digital transformation amongst utilities in North America, the COVID-19 pandemic has also revealed new vulnerabilities in the industry, according to the findings of a new report released by the Information Services Group.
The report, Utilities Industry – Services and Solutions, states that traditionally utilities in the region have focused on the risks of weather and natural disasters and paid little attention to enhancing their supply chains, workforce collaboration, customer service, cybersecurity and other operations that require digital solutions.
Before the pandemic, utilities’ digital transformation programmes were mainly focused on modernising aging infrastructure and responding to climate change, states the report.
However, the pandemic has pushed utilities to invest in the deployment of digital technologies capable of helping them to improve the resilience of their supply chains, grid networks against cyberattacks and to enhance workforce management and customer services.
With work-from-home regulations in place, digitalisation has helped utilities to ensure continuity of work by staff as agile work-from-anywhere models with enhanced cybersecurity capabilities were established, according to the study.
Modernising customer service infrastructure
Modernising customer service infrastructure is another major challenge utilities are taking on, the report states. Replacing customer information systems (CIS) requires major investments of time and capital, as well as organisational change management to foster acceptance of the new technologies in this traditionally conservative sector.
Service providers are helping utilities carry out these changes through training, tools, accelerators and execution frameworks that reduce the risks of CIS transformation. Moreover, digital transformation projects focused on the development of new and innovative customer service platforms with functionalities such as voice, text, chatbots, social media and in-person contact, that are capable of improving customer experience and engagement.
In addition, utilities are now leveraging data management and data science for supply and demand forecasting, situational awareness, automated demand response, and other functions, a development simplifying the transition to renewable energy. The installation of smart meters and automated outage prediction tools is helping utilities to address the persistent challenge of changes in energy demand and the fluctuating nature of renewables.
Other key study findings from the report include:
Renewable energy driving merger and acquisitions (M&As): More M&As and other consolidations are expected to take place in the energy and utilities industry as companies try to align their portfolios with environmental and sustainability goals.
Growing penetration of distributed energy: Utilities are moving rapidly towards wind, solar, and other green sources of energy to reduce their dependence on coal and fossil fuels.
Increasing competition from niche players, particularly in deregulated markets: Large utilities players are under pressure from regulators to keep energy prices low and are losing market share to nimble, asset-light competitors, thus impacting their profitability.
Increased competition from other industry and new revenue streams: With the advent of renewables generation and electric vehicles (EVs), the lines of operations between utilities and adjoining sectors such as oil and gas are blurring. Over the last few years, some of the large oil and gas companies have made bold investments in the utilities sector as part of long-term plans to decarbonize their energy portfolios.