Post - Blog
UK utilities know they must deliver more on customer service, efficiency and costs, but figures show that their efforts are stalling. By Saul Zambrano , Global Industry Director for Energy and Utilities at Software AG
Hydrogen Americas Summit
Customer satisfaction within the UK utilities industries often comes under fire. Traditionally it has lagged behind other industries and has plateaued recently [1] . This is complicated by the fact that there are more and more entrants into the utilities market; there are now around 60 independent suppliers compared to just 11 a decade ago. Indeed, the market share from the incumbent “big six” energy providers has now dropped to 80 per cent.
UK utilities know they must deliver more on customer service, efficiency and costs, but figures show that their efforts are stalling. They are often stuck between a rock and a hard place, with legacy technology, more stringent regulation and rising customer expectations. This makes it a complex challenge.
Better data management is the start of the solution, but this alone cannot solve the challenges ahead. Data lies at the heart of every initiative, but organisations need to do more than just collect endless amount of data. They need to know what the data means and what you can do with it. Let me explain.
Previously, utilities were fairly simple to manage; they built a plant, generated power on demand and then sent it along transmission and distribution wires to local customers. When the wires stretched too far and the electricity supply could not keep up with demand, they built another plant to serve a growing customer base. Customers paid their prices and any downtime – although inconvenient – was generally accepted.
Today, the global population is booming and nearly everything requires electricity or other power sources to work. There are now over seven billion people in the world, and this is expected to rise to 10 billion in the second half of this century. And every one of those people will need power in their homes and workplaces. Electricity is as essential to life as food, water and air. Doing without lights, heating, air conditioning, computers and TV is considered anathema in modern societies.
Within this century, energy generation and distribution as we know it will cease to exist. Driven by massive electrification, calls for deep decarbonisation in response to the climate crisis, and the desire to decentralise energy in response to advances in technology and energy transformation is inevitable.
This has given rise to a diversification of supply coming from cleaner sources – hydro, solar and wind in the main. This supports both the need for greener sources of energy, but also a more diverse supply to provide greater resilience. Many of these supply sources do not belong to any particular utility; some are privately funded, some are owned by cities, and an increasing amount are owned by commercial and residential customers as they seek to take greater control of their energy decisions. This supply has to be integrated with the power supply of a local utility – identified, managed and controlled as part of a utility’s overall business strategy.
The new diversified and distributed generation business model requires complete alignment between enterprise IT and business if utilities companies are to improve the integration of these resources in a manner that increases reliability and customer satisfaction.
How will the IT organisation support the business in the transition to the new distributed energy economy, while faced with the reality of flat and or declining IT budgets?
Better the data you know
The answer is to know your data. As the utilities industry has evolved, data is at the heart of ensuring all the moving parts are kept in order.
Data is an integral part of an active approach to energy management. Active energy management is a holistic view of the strategies and resources needed to reduce consumption, drive innovation and maximise savings. Rather than treating the procurement, dispensation and evolution of energy as disparate activities, an active approach assumes that these activities are interdependent and indispensable.
By addressing operational efficiency, enabled by digitisation and technology, operators can reduce susceptibility to outages and potential downtime. Strategically sourcing energy supply from a diverse portfolio that includes renewable generation reduces risk while maximising continuity.
Dynamic networks demand new connected technologies, from thermal sensors on conductors to advanced substation automation systems to keep them running efficiently. These create a deluge of critical data. As we know, however, data on its own – devoid of context or analysis – is next to useless. True transformation depends on applying this information to solve the specific challenges that utilities face and understanding the relationships between different parts of the business and its infrastructure. Managing increasing amounts of data and converting it into meaningful insight allows utilities to make informed interventions on their networks. This will enable them to react to the increasing dynamic activity on the grid and keep it running in the most efficient way.
Simply collecting the data will not be enough. It is vital that utilities make the most of advanced analytics, network modelling and IoT technologies to manage their networks in a much more flexible and efficient way. The ideal way to address these is for utilities to gain a single view of enterprise IT in order to better align their IT portfolio with the business strategy.
In order to bring utilities companies up to date and deliver customers a wide range of expectations - including exemplary customer service, efficiency, better costs and green credentials – utilities must make better use of their data. Utilities know they must deliver more and, ultimately, technology provides the opportunity to deliver it, with better quality.
[1] https://www.telegraph.co.uk/business/2018/02/27/utility-customer-satisfaction-flat-lines-complaints-drag/