When discussing the future of the digital grid, it may seem counterintuitive to argue a customer-centric view of digital transformation. And yet, it is ultimately the changing demands from the utility customer that is driving utility digital transformation.
Utility customers can no longer be considered as mere endpoints on the grid, or “the load at the end of the wire.” The old paradigm was a linear system that flowed from generation, to transmission, to distribution, and finally ended with the customer. This old value chain is rapidly being replaced with a circular system in which customers can react to changing system demands and provide valuable services back to the grid. Customers are becoming active participants, both in their energy usage and, increasingly, their energy production, as well. This is changing the way in which utilities need to operate.
This value chain isn’t just an energy value chain. Increasingly, it is also a data value chain, with both customer and grid data being integrated all around the circle. Digitization of the grid releases the full value of that data in new, more agile utility processes.
What will this ultimately look like? Let’s paint a picture of the fully digital utility.
The digital utility of the future
A digital utility will not have information silos, but instead, fluid integration between all systems and processes, allowing the free flow of information between operations (for network management) and customer care. Digital information tracking and management will move to the cloud, and all business decisions will be driven by real-time data. Standardization of processes will have become a priority, and will drive best-of-breed IT system selection. Cloud deployment will expand to all systems, and system upgrades will be automatic, immediately delivering the latest capabilities. The utility’s digital grid will be able to connect and support high distributed energy resource (DER) penetration and energy storage with traditional generation–without compromising grid reliability and resilience. Digitization has also allowed the utility to quickly pivot as customer expectations and communications trends change, and has created a deeper level of customer engagement across all channels.
Obviously, we’re not quite there yet. Here’s how digitization is playing out within utilities right now: Within utility operations, the digitalization of plant and T&D assets is delivering new opportunities for proactive maintenance and performance improvement. Digital technologies provide utilities with the increased real-time visibility, flexibility, automation, and control needed to increase efficiency and respond more quickly to changing grid needs, both with traditional generation and new edge-of-grid energy resources.
Within the realm of customer experience, which is typically where utilities start to address the digitization of their enterprise, utilities are increasingly connecting to customers digitally and communicating across multiple channels to provide information to them more quickly and easily. But that’s not enough: it’s not just faster information today’s customers want, but also different information. Utilities need to ensure they are examining how their operations match the way they work with their customers. There is often a disconnect here. Most utilities work in departments, with processes and tools geared to each department’s function. This model can be very limiting in the digital world. Becoming a digital utility means that information from multiple departments and multiple sources are brought together.
Taking this step requires a step back: begin by breaking down information barriers and silos and looking at the business in a more holistic fashion. How can you strategically digitize your business as an entity, with technology and information driving this change? These opportunities begin to occur when customer technology begins speaking to information technology, built on data derived from operations technology, in an integral loop.
The three sisters of digital transformation
There are three essential areas in which digital transformation needs to occur within the enterprise. These are:
1. Transformation of Technology and Information
2. Transformation of the Workplace
3. Transformation of the Customer Experience
Getting the right combination of commitment, ability to accept change and the right technologies that will work together is the crucial recipe for success.
Again, the new data that digitization provides is key: customer expectations are only one element of the challenges facing today’s utilities as they work to drive costs down and efficiency upward. Utilities need to capitalize on the wealth of data that is collected to drive operations forward. They need to take advantage of using the right data at the right time to initiate the right actions. The investment in operational technology provides the ability to really understand nuances of the utility business like never before. Data collected from sensors, switches, and equipment provides the basis for automated workflows. Machine-to-machine communication relies on data collection and dissemination to the right location, for the right use.
Through analytics, utilities are able to make use of all that data. Analytics is a vital building block enabling utilities to make predictive corrections rather than react to events. People are able to get the information they need quickly–driving huge gains in productivity, reduced waste in time and materials, and of course, lower cost.
Entering the era of the cloud
Another mindset shift that needs to occur has to do with selection decisions. Utilities need to ask themselves, “Why not cloud?” In recent years, solutions have become more readily available in the cloud, allowing utilities to take advantage of the speed, scale, and simplicity of cloud offerings in order to start realizing value faster and at lower costs. This brings great agility and the ability to focus internal resources on innovation, instead. As this technology selection process evolves, utilities gain the ability to change out legacy solutions and take advantage of faster, easier, and better technology today.
Interconnectivity is a prime concern now in processes and in selection of hardware and solutions. With equipment now able to collect more data, the capability to use that data becomes more imperative. As utilities build out system-generated processes, the elements (machines and people) involved in each process must each have the best information. Therefore, standards in data use and data connection become more critical to the success of deploying digital work. Seeking out equipment and solutions that demonstrate the ability to provide the interconnectivity is critical.
Customer transformation enabling business transformation
The transformation of the customer means transformation of the utility’s business. The very nature of communication with the customer–from push communication to bi-lateral communication through multiple channels–needs to change.
Digital channels allow utilities to eliminate the lines between operations, information, and customer technologies. As noted earlier, the consumer is no longer just an end user of the product, the consumer is a part of the process. Digital technologies give utilities the ability to bring the customer in and allow the customer to then choose how much and by what channels they want to be integrated. Digital technologies also allow the utility the ability to account for customer behaviors in how they plan and operate the grid, right out to its edges.
This convergence exposes the customer’s growing standards and utilities need to work to those standards as the customer has greater visibility of the utilities, and the utility has greater visibility of the customer as a whole. Better information means the ability to provide better, faster service.
It all comes down to the data
In the digital grid of the future, data needs to be allowed to flow seamlessly in all directions:
Utilities need visibility and access to data from the edge of the grid. Customers need easy access to their own data, and the ability to share it with third parties if they choose to do so. Utilities, too, need to be able to share aggregated and anonymized data with third parties as necessary as they seek new solutions to grid challenges.
In the future, kilowatt hours may in fact be the least important element of data that needs to flow between utilities, customers and third parties. In that value chain, the kilowatt hour, which drives revenue today, may become the least valuable commodity purchased by a consumer in the future; the other value-added products and solutions related to grid access and grid value may be what customers will be buying, instead.
About the author: Rodger Smith is Senior Vice President and General Manager, Oracle Utilities.