Utilities in deregulated markets are under more pressure than ever to attract and retain customers and are therefore more motivated to consider new technologies to extend their energy services offering.
Previous posts in our Future-Proof Utility series have discussed the driving forces behind utilities’ push for innovation, and the importance of a customer-centric approach. While both of these concepts are of crucial strategic importance, technology is the vehicle that will ultimately bring the future-proof utility into being.
That’s why this post will zero in on 5 technologies utilities are exploring and investing in, and what kind of capabilities they will need in order to meaningfully expand their energy services.
Technology that can help evolve the utility services offering from selling pure kWh to providing digital energy services is essential in meeting the demands of today’s highly demanding, digital-first customer.
More and more utility customers are asking for products that give them more visibility, flexibility and control over their energy consumption. For instance, an Eon survey of 2,000 UK homeowners found that 55% cite energy efficiency as their main driver of installing smart technologies.
Even the world’s biggest corporations are announcing bold energy productivity targets – including H&M, as part of the EP100 initiative, or Walmart, who aims to reduce building energy intensity by 20% from 2010 levels.
And utilities are the ones customers to help them get there. This is evidenced by another survey of C&I and public-sector energy users in the UK, which found that utilities are trusted to implement smart solutions over and above all over vendors, including engineering and technology firms.
Yet, a significant demand gap exists between what utility customers want and what their energy providers are able to offer from a technological point of view. Here are 5 technologies, from well-established to newly emerging, that will be best placed to fill that gap:
5 Technologies for Data-Driven Utilities
Real-Time Energy Analytics
Utility business customers are increasingly determined to manage their energy consumption patterns how they want, when they want – in real time.
That’s why commercial building owners and facility managers are installing energy monitors to close their building energy performance gap by detecting peaks in consumption or forecasting future fuel requirements.
Industrial facilities and manufacturers are especially keen to use predictive analytics to monitor heat and cooling equipment performance that can automatically alert malfunctions, prevent errors or notify when it’s time for maintenance. Even residential customers want on-demand, real-time access to manage and control their personal energy consumption. In all of these cases, utilities are well-placed to provide through mobile applications and real-time solutions.
In one example, Google AI company DeepMind was able to reduce its total data center power consumption by 15% which will translate to hundreds of millions of dollars in savings over the next several years. Google also claims that they have already achieved a savings rate of 40% on power consumed for cooling purposes alone by using artificial intelligence to optimise energy efficiency.
According to Google Data Center Engineer Jim Gao, “actual testing on Google data centers (DCs) indicate that machine learning is an effective method of using existing sensor data to model DC energy efficiency, and can yield significant cost savings.”
Similar Big Data and machine learning methods could be applied to utility buildings, to evaluate new plant configurations, assess energy efficiency performance, and identify optimisation opportunities. Energy analytics can also help utilities improve grid management by enabling network balancing with production and consumption forecasting, predictive maintenance of grid infrastructure, and the creation and management of demand response programs.
Utilities continue to explore innovations based on load disaggregation and behavioural change programmes that use gamification techniques. Virtual audits are one such example. They use Big Data algorithms to disaggregate utility usage into end uses, such as lighting, pumping, and HVAC. Virtual audits can also identify energy-saving measures by detecting wastage points, peak loads and building automation problems.
Virtual audits can help boost engagement by helping utility customers clearly visualise two important cost-reduction factors: their energy use patterns and behaviour, and their energy savings potential from retrofits or upgrades to more energy efficient equipment. They also do it quickly enough to meet the expectations of today’s digital native, always-connected customer – and at a fraction of the cost.
Utilities are especially well-placed to “nudge” their business customers toward data-driven energy efficiency. Many of these C&I customers are responsible for a large portfolio of buildings, which requires a great deal of time to track and review for energy efficiency projects. When hundreds of virtual audit reports can be combined into a single, powerful interface hosted by the utility, business customers will spend more time engaging with their providers to prioritise sites, track projects and evaluate the results.
Demand-Side Management and Demand Response
Data-driven energy analytics can be applied to demand management to benefit utilities in several use cases, including demand response enablement. Significant advances in smart metering, dynamic market-based prices, time-of-use rates, and energy management systems have the potential to make electricity loads more responsive to economic and operational signals than ever.
What kind of specific capabilities do utilities need to roll out successful demand response programs? On the customer experience side, utilities will need to think about program design and delivery – which customers are more likely to participate? What will be their end-to-end journey, from enrolment to rewards?
Internally, utilities will need to be technically capable of forecasting load drops, grouping the customers into virtual power plants (VPPs) based on their distributed energy resource (DER) generating capabilities (think electric vehicles, rooftop solar, smart meters, and self-contained microgrids). Then the utility would need to coordinate dispatch events, bill and settle events, offer rewards for changed customer behaviour and have those changes reflected clearly reflected on each bill.
Similar to virtual audits, demand response programs are complex and require inputs from many different data sources. Managing them through a cloud-based “mission control” dashboard would facilitate interfacing with billions of interconnected device loads connected through the energy Internet of Things. As we mention here, new data management and control system partnerships with new market actors will be essential in coordinating DERs and their associated energy services, including demand response.
Blockchain is likely to become the backbone of the decentralised energy system in which both utilities and consumers will produce and sell electricity. Utilities therefore need to be ready for a blockchain-enabled future where peer-to-peer (P2P) wholesale trading, flexibility trading on regional grids and synchronised grid management processes between TSOs, DSOs and end users are the norm. A decentralised market could also shore up revenue for European utilities through efficiency gains, while making pricing data available for anyone to see, thereby opening the market to smaller players.
Here in Europe, several utilities are already starting to experiment with this technology. In May, 26 energy trading firms converged to conduct P2P trading in the wholesale energy market using the Enerchain framework – an application that was used to execute the first European energy trade over the blockchain last year. The goal of Enerchain is to create a blockchain-driven exchange that provides energy wholesalers with a way to list and sell expected future energy generation.
The largest utility conglomerate in Austria, Wien Energie, is also conducting a blockchain trial with two other utilities, while Innogy in Germany is running a pilot to test if blockchain can authenticate and manage the billing process for EV charging stations. In Britain, a startup called Electron is developing a blockchain-based platform that will enable customers to switch utilities within 24 hours.
Utility providers have a less than savoury reputation among consumers when it comes to customer experience, as we explain here. Long hold times, complicated processes, and a lack of empathy in communication are among the problems facing customers when dealing with their energy providers.
Chatbots are one way utilities can offer an always-on connection their customers, providing peace-of-mind and eliminating fears of unresponsiveness. With a chatbot, utilities can automate the most repetitive customer service requests and offer the transparent, direct and solution-driven communication that customers have come to expect. Gone are the days of waiting for an email reply! No more listening to that terrible hold music or explaining your issue for the nth time!
Mobile messaging and automated chatbots have additional uses, such as providing customers with relevant and updated information in real time, during emergencies or outages for example. When customers feel connected, safe and informed, the quality of the relationship is elevated – churn is reduced and retention rates start to go up.
Time to hear about some real examples. As we mentioned in our last post about utility customer engagement, Pure Planet has developed a chatbot called WattBot. Powered by AI algorithms, WattBot was built to answer the usual customer queries drawing on Pure Planet’s team of energy experts.
In April 2017, E.ON launched Sam, supposedly the energy industry’s first ever virtual assistant specifically designed to offer customers a smarter solution to help them manage their energy accounts when they’re moving home. Currently, Sam is only available online to E.ON customers when they’ve logged into their account. E.ON plans to enable customers to tell Sam about their meter readings at their new property, to choose their tariff and to raise any doubts with advisors, whether they have an online account or not.
By no means an exhaustive list, each of these 5 technologies can be a potential vehicle to deliver the proactive energy management required by the utility of the future. Over time, we can say with confidence that a broad array of new technologies will find their way onto the “retailised” grid as utility offerings. These changes are already happening as OEMs, startups, new entrants and VC funds bring new data-driven technologies to revolutionise the power sector.
It is up to utilities to find ways to incorporate these emerging energy services into their business models and tailor them to each customer segment. Our decade of experience has shown that collaboration and synergy between agile technology experts and incumbents is a winning combination to make this a reality. Don’t get left behind in the transition to a new era of decentralised power – partner with an experienced energy analytics provider to leverage your technology capabilities today!