Power and Utilities Trends
Digitalization is the center of new power and utilities innovations as well as customer demand. The power and utilities industry has yet to catch up to consumers’ surging interest in new power and utilities products like smart phone thermostat apps. The speed of digital technologies is driving customers’ interest in adopting new innovations. For a power and utilities company, innovation is no longer just a buzz word; technology innovation is now a major strategy to meet customers’ expectations. There are several trends that gained steam in 2017 and are expected to be serious market forces this year and into the future.
Renewable and Distributed Energy
The increasing market presence of renewable and distributed energy cannot be ignored. Evolving consumer preferences, costs reductions, and technological advances have driven this acceleration in the industry. Renewable energy is adding scale, and in the next 10 years, global capacity will double. Smart, scalable technology has helped lower the costs of renewable construction, operation, and maintenance.
Managing Energy Consumption
For economic and environmental reasons, more business customers want to control their energy use patterns. Industrial facilities use intelligent sensors to track heating and cooling equipment performance, disturbances, and maintenance needs. Energy monitors in commercial buildings can forecast fuel requirements. Energy efficiency has three goals:
- Competitive advantage
- Boost the bottom line
- Environmental sustainability
These goals have inspired a shift in business power usage toward renewables.
In the residential sector, the popularity of devices like Amazon’s Alexa and Google Home has renewed interest in smart-home technologies. After a weak initial response, consumers are increasingly warming to the appeal of smart heating devices and smart meters. Consumers can reduce energy costs by tracking and calculating their real-time energy consumption levels. Customers are accustomed to having more control of various systems and tasks, often via their smart phones. Online portals for pay-as-you-go renewable energy and monthly digital subscription models are examples of new customer-centric innovations. Public-sector users are also expressing more interest in smart-building solutions.
For utilities to take advantage of this growing interest and establish new business models, they’ll need to employ “retailization.” This concept involves direct consumer-to-utility interaction like we see with online banking and shopping. Retailization may involve:
- Outage information directly from electric utilities
- Real-time billing and mobile payments
- Energy efficiency audits
- Home energy management solutions
- Real-time mobile and digital experiences
- Battery storage
- Intelligent substations
Increasingly, new business and home power installations are providing telecommunications links, security, and infotainment along with energy. These “gateway hubs” are part of the technology revolution a group of manufactures and nontraditional startups are leading in the utility sector. Customers’ expectations for utilities innovation has lessened the traditional boundaries in the industry.
Data Analytics Capabilities
Increasing analytics’ value to utilities is emerging as a serious market opportunity that requires moving beyond a commodity-based model. Utilities will expand their relationships with large commercial and industrial customers by providing:
- Software-based data analytics
- Alternative generation courses
- Sensor-based energy monitoring systems
- Equipment replacement
- Energy storage
- Facilities management services
Digitally enabled offerings are the most direct route to high-value service capability.
Development Partnering Approach
These emerging new digital capabilities may be difficult for some utilities to adopt on their own. Sensors and storage technology, pricing strategies, data analytics, and real-time business model development may need to be incorporated into an existing business. Partnering with outside experts can be a step toward go-to-market models. The utility can become part of a broader energy platform.
Market Participation Flexibility
In addition to partnering, some large utilities are using mergers and acquisitions to grow into energy service management. This allows them to leverage existing expertise, channels, and market presence to build a customer-facing model. Energy service management moves utilities beyond the old regulated utility model toward more flexible market participation, products, and services. This flexibility would involve shared performance gains, adjustable pricing approaches such as fees-for-service, and value-based margins.
The future will favor flexible power and utilities companies that have grown beyond old models and established portfolios built on market-based technologies and services. Customers want more control, and utilities must evolve to satisfy this growing demand. To keep up with all these new industry trends and innovations, as well as regulatory compliance, you need a comprehensive, nimble training program. Consider the Power and Utilities Subscription Library from 360training.com.