To stay in business, power companies are being forced to meet demands by shifting their existing business models into a digital utility model, according to a new report by the World Economic Forum.
By automating their operations, utilities’ probability to optimise their operations through improved management of their power distribution, transmission and customer services is high.
Digital utility industry and economic benefits
Not only will the shift benefit utilities, but the development is also expected to positively contribute on the economic side.
The World Economic Forum predicts that such a development of the utility sector will result in the creation of up to 3.45 million jobs between 2016 and 2025 with the consumer renewables sector followed by the energy storage integration sector leading in jobs creation.
Besides the US$271bn the sector will contribute to the job creation, the development is also expected to generate a value of US$754bn in carbon reductions and US$986bn in value creation for customers.
To help in the digital transformation of the utility industry, the WEF in collaboration with Accenture drafted some guidelines.
Digital transformation planning
According to the recommendations, utilities need to divide their operations into four main categories to simplify their investment and transition from the traditional business model to the digital one.
The models as highlighted by the report include the asset life cycle managers, distribution platform optimisers, energy solutions integrators and beyond the electron experience providers.
By investing in the asset life cycle managers division, electricity firms are enabled to build a low carbon supply portfolio, supporting digital technologies such as smart sensors to optimise both central and distributed sources thereby reducing their operational costs.
Commenting on the advantages of automating the asset life cycle, CEO of AutoGrid, Dr. Amit Narayan, said: “Data is cheap, clean and the only resource that is increasing. Machine-learning algorithms can do a great deal to improve efficiency and predictability.”
Data analytics and non-revenue electricity
While investing in digitalising the grid, the optimisation and aggregation sector will ensure utilities tackle inefficiencies and waste in the transmission and distribution systems.
The technologies will able grid optimisation through real time load balancing and network controls, enabled by connected devices and advanced monitoring capabilities.
The sector allows utilities to receive the latest usage information from customers in real time, while customers will receive up-to-the-minute pricing signals and tariffs.
The director of group strategy at Centrica commented: “data is enabling the network to be cheaper, allowing less spare capacity on the system, offering much finer optimisation and flexibility in meeting requirements.”
Integrated customer services will allow utilities to shift from energy centric to customer centric through usage of customer data to better understand customer behaviours at the same time allowing consumers to optimise their homes, choose tariffs of their own choice, manage consumption and payments and embed self generation.
According to the report, the demand for such services has resulted in increased partnership between utilities, software providers and blue chip vendors for development of integrated customer service.
The WEF report concludes that by modernising, utilities are more likely to stay in business as this would allow them to provide a hyper-personalised, connected service that adapts to the changing consumer business and citizen.
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