Living on the edge — Customer experience in the Utility 4.0 era
One direction no more
Energy used to flow one way down the value chain. Power plants generated power, high-voltage lines transmitted to your neighborhood substations, and the wires from poles brought it home. And all of this happened behind a meter with consumers only ever engaging when using electricity or paying a utility bill. They knew nothing of how they got their energy let alone do anything about it.
Today though, the grid is a multidirectional, decentralized ecosystem that also includes renewable energy, electric vehicles and consumers are no longer just consuming but also producing energy off their solar rooftops or wind farms. As demand continues to surge, and we chase decarbonization targets and sustainable development goals, how does an industry, traditionally opaque to consumers, deliver greater value and build deeper relationships?
From passive consumers to active participants
“Where’s my electricity coming from? Who’s my supplier? How do I control my spending? How do I reduce my carbon footprint?”
Grid participants no longer want to remain passive subscribers. They not only expect to get what they need, when they need it, without the friction of middlemen but also demand transparency, control, and empowerment. Yet, switching suppliers, cutting costs, and reducing carbon footprints is still only scratching the surface. Energy efficiency and demand response programs are only the beginning.
Rise of the prosumer
More and more consumers in homes and industry are investing in their own solar panels and wind farms. As energy producers, they are looking not only to be self-sufficient, but also to profit from any surplus energy they can contribute to the grid. With advances in energy storage, battery systems and electric vehicles, these ‘prosumers’ will become energy traders and want to optimize their consumption and production to the most commercially advantageous times of the day.
“What’s in it for me?
Savvier Consumers are driving change in the energy industry. Digitalization across industries has opened their eyes to new possibilities and greater expectations backed by OT/IT convergence. Yet the vast benefits of the data collected by smart meters still elude consumers when they could for example be getting granular, appliance level electricity information for better energy management and even fault detection. It is what energy companies chose to do with the information collected from their smart infrastructure that makes all the difference in their consumer engagement efforts.
Serving the grid edge
As consumers turn away from commoditized, centralized and coal fired electricity towards renewables and battery storage, the future for grid operators will be in the new revenue streams afforded by energy services, data, and analytics at the grid edge. ‘Edge’ is a catch all term that denotes consumer facing solutions as opposed to utility facing one. Encapsulating the idea that energy control and distribution is now being driven from many parts of the grid rather than one central location, grid edge solutions include hardware (solar panels, advanced metering infrastructure, smart inverters, energy storage systems, smart thermostats, smart appliances etc.), software (demand response, real-time analytics and optimization, integrated distribution system planning systems etc.), services and new business models.
Grid Edge solutions that combine smart meter data with actionable analytics, machine learning and fault detection offer huge opportunities for energy companies to transform business models and compete in the new energy marketplace. The energy bill of the future has the potential to become a platform from which energy companies can offer increasingly innovative products, solutions, and revenue streams
A new role
These are fundamental changes from the unidirectional value chain of the past. Grid operators will therefore need to transform their services and business models and embrace their new role as data hub and market facilitator. DSOs and grid operators today are responsible only for the reliable flow of energy but also of information. Not only are they expected to balance demand and supply, integrate renewables, accommodate electric vehicle charging and ensure a safe, efficient network but also to give secure, non-discriminatory access to information to suppliers, consumers, regulators and other participants.
Challenges old and new
Regulators are imposing tougher scoring and penalties; supplier switching is getting easier in a cost driven marketplace and erratic EV charging and renewables are throwing the grid into imbalance. Like every other industry visited by the forces of digitalization, decarbonization and decentralization, the energy and utility industries face increasing pressure to reinvent themselves. As climate change takes center stage, it’s not just national regulations and international SDGs that are changing. People worldwide are seeking inspiration and empowerment to act and contribute while also not becoming part of the problem.
To step up to energy companies and grid operators must harness the power of digitalisation to better engage a more digitally savvy consumer, play a part in reducing energy costs and create new business models to secure their future success. Moving to the cloud is going to be a a necessary precondition for transformation without which, the required speed, scales and security of transformation would remain elusive. Powered by actionable insights, internet of things, ambient computing and other 4th platforms technologies, the internet of energy is upon us and can truly facilitate our transition into an energy conscious and energy active society. Graduating from smart homes and industrial automation to ‘Conscious homes’ and ‘autonomous industries’ that regulate themselves without human intervention, will need smart grids to become ‘Active grids’ that inform, empower, and orchestrate the grid and its participants with actionable insights. For commercial and industrial consumers this can be particularly advantageous as energy costs can be among the highest operational expense in many verticals.
Powered by digitalization, OT/IT convergence and the democratization of data, the energy consumers of the future are connected, commercial, and autonomous often actively contributing into the grid and transacting in the new Internet of Energy.
Energy providers and DSOs will therefore need to act now and ready themselves for their changing role in the energy, utility value chain as data hubs and market facilitators. Advances in cloud computing, internet of things, artificial intelligence and machine learning provide utilities the necessary tools for this transformation towards enhanced customer experience and improved operational efficiency.