How utilities can adapt to provide new services and technologies, invest in a modernized grid infrastructure, and use modern channels that reach and engage customers in new ways.
It’s been almost 140 years since the lightbulb was invented, more than 60 years since the first solar cell was commercially available, and more than 50 years since LED lightbulbs were first produced.
Fast forward to today. Solar energy is now a cost-effective energy source – and one of the most abundant in the world. A single wind turbine can power 600 homes. Numerous energy-saving smart thermostats in market are certified as ENERGY STAR devices. And in the second quarter of 2018, residential storage deployment surpassed utility storage deployment for the first time ever.
As energy options evolve with a focus on renewable energy, energy efficiency, and connected devices, customers are taking a more active role in energy management. Today, consumers expect more choice, control, and convenience in everything they do. That includes managing the purchase and consumption of their energy. And newer energy technology is constantly maturing, becoming more reliable, consumer friendly, and driving down high costs that may have deterred customers in the past.
This poses a new challenge to utilities. As customers invest in products and services that are controlled by other energy service providers, the demand for some traditional utility services is being challenged, which has implications for the established utility cost-of-service business model.
But with every challenge comes opportunity, and the energy industry is ripe for change. In this new energy landscape, utilities can adapt to provide new services and technologies, invest in a modernized grid infrastructure, and use modern channels that reach and engage customers in new ways. And they can accomplish all of this while providing a reliable and resilient grid that supports our increasingly digital–and electrified—lifestyle.
For utilities to thrive in this new energy paradigm, it’s critical to focus on three opportunities:
Adopt an integrated grid planning approach
As the grid becomes more integrated and decentralized, the lines separating generation, transmission, and distribution are blurring. As a result, resource planners seek to balance traditional supply with distributed and demand-side resources for the least cost. What new assets and programs are needed? How and where should utilities leverage them? Can existing infrastructure accommodate them? Who is ensuring they’re developed to optimize customer benefit at lowest cost while still providing for the reliability of the grid and basic fairness for access to electricity?
Success today means a streamlined view of operations and an integrated grid management and modernization plan. More than ever, utilities’ teams must be able to adapt to market and technology changes, minimize risk, and identify opportunities for growth. For example, the evolving “grid as a platform” model provides utilities an opportunity to modernize the grid, and also provides customers with greater optionality for energy management and choice.
Harness the power of distributed energy resources
Fast-growing distributed energy resources (DER) like solar and storage offer opportunities but also raise a series of questions regarding how they are deployed–ownership structure, visibility, and controllability–so that they add to the grid in a positive way. As utilities continue to evolve their traditional strategies and programs, there is a need to balance customer choice, third party innovation, and the utilities’ evolving business objectives.
When deployed in a strategic way that fundamentally integrates DERs into the utility planning process, utilities can both response to customer needs and ensure that these resources are deployed and dispatched in an economic manner.
Focus on building and maintaining customer relationships
Energy customers are no longer just rate-payers, and the utility is no longer just responsible for connecting customers to a safe, reliable, and affordable grid. With more options than ever before—from rooftop solar to electric vehicles to smart thermostats—energy customers expect their utility to be a trusted energy management partner.
For utilities, that means reconsidering the customer relationship at every stage. By understanding the customer journey and prioritizing the customer experience, utilities can better educate their consumers about new offerings that boost convenience and control. Using emerging technologies like data analytics tools and connected devices, utilities can implement personalized communications across multiple channels, thus delivering the right message to the right person at the right time.
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What other challenges and opportunities are impacting the energy industry? How are utilities and other stakeholders innovating and adapting in the face of change? Share your thoughts with us on LinkedIn, Facebook, and Twitter.