Smart grid realizing benefits sooner than expected

More than two-thirds of utilities executives believe that the benefits of smart grids and smart meter deployments, which include improved customer service, reliability and outage response, will exceed original industry forecasts, according to a survey by Accenture.

A majority of executives surveyed (85 percent) also expect the industry’s landscape to change in the next five years, with more new entrants in the areas of energy efficiency and demand response, data services and distributed power generation.

The digitally enabled grid survey of 54 global utilities executives in 13 countries found that for 98 percent of the utilities represented, the smart grid is a natural extension of the ongoing upgrades to the electricity network, confirming that smart grid technology has become a core part of their investment strategy.

“To ensure the delivery of safe, reliable and affordable energy to consumers, utilities will need to make significant investments in grid infrastructure and technology, in order to accommodate new sources of supply and demand, such as electric vehicles, distributed solar power, microgrids and energy storage,” said Jack Azagury, global managing director of Accenture smart grid Services. “Our research confirms that executives expect smart grid solutions to reduce the cost of grid maintenance and upgrades and improve the reliability of the grid, while allowing it to support new technologies.”

Nearly two-thirds (60 percent) of the executives said that, for their company, analytics solutions will be the highest priority smart grid investment in the coming years. Among North American executives surveyed, however, that number is even higher at 75 percent.

Further analysis by Accenture indicates that for a representative North American utility, an investment in smart grid analytics can result, conservatively, in an estimated $40 to $70 in savings per electric meter per year. The analysis shows that asset management analytics provide the greatest value, followed by grid operations analytics, revenue protection analytics and outage analytics.

According to Accenture’s survey, utility executives share a similar point of view: 96 percent of global respondents rank grid operations analytics and 92 percent rank asset management analytics as the two types of investments that will create the most value from smart grid analytic solutions.

Unlocking the full benefit of smart grids requires an enterprise-wide view of systems and data through the integration of traditional IT solutions with the operational technologies required to manage the grid. The convergence of information technology and operations technology is critical to managing an increasingly complex and data-driven utility, but Accenture’s research shows that the vast majority of utilities do not have the necessary capabilities to handle such complexity.

Utilities executives globally view access to the right IT skills as the most critical factor to managing and integrating the increasingly large volumes of data. However, only 25 percent feel that they are currently very well positioned to compete for analytic skills in the market. In addition, more than 80 percent say that current analytic capabilities such as data governance, data integration and analysis toolsets need some or significant improvement.

The path to a lower-cost and more reliable grid is not without obstacles. The future for utilities is becoming increasingly complex with increased competition predicted over the next five years in areas such as beyond-the-meter services, data-related services, and distributed generation.

With these new technologies creating both opportunities and challenges, executives are evenly divided as to whether the technologies will drive up revenues or cannibalize the current business model: 43 percent of respondents believe that distributed generation will provide more upside revenue opportunities, 43 percent believe it will drive a reduction in revenue and 14 percent see no impact.

“Utilities will have to choose whether to embrace these developments as they emerge or attempt to control their impact through legislation and regulation,” Azagury said. “The leading utilities will be the ones that embrace the potential offered by new smart grid technologies and adapt their business model to leverage these into new business opportunities for growth.”

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