As the energy landscape evolves and wholesale costs continue to rise, utility companies are under increasing pressure to meet the expectations of consumers and shareholders. On top of this, aging infrastructure, legislation and climate change are shaping the future of the sector as everything becomes smarter. From smart grids to smart meters and even smarter customers, utility organizations have to respond. For better energy generation and distribution, utility companies must drive excellence across the entire operation – from the management of your assets to responding to disruptive market conditions and consumer demands.
Operational excellence unlocks the full value of your data, enabling agile performance while also delivering cost savings and efficiencies that enhance the all-important customer experience. Here’s how to deliver operational excellence in utilities.
Driving improvements in decision-making to reduce the bottom line
Consumers expect the same seamless digital experience from utility companies that they find in other sectors, but they are reportedly offered ‘one of the worst’ experiences. That has to change.
The ultimate goal for operational excellence is to achieve a perfect balance between supply and demand. This requires a combination of a bi-directional flow of information between suppliers and consumers and the ability to apply complex load forecasting analytics. Gaining greater control of the facilities and assets themselves makes this more achievable. By focusing on running businesses on minimum costs while providing optimum services, you can drive significant improvements in decision-making to reduce the bottom line.
Making the most of digital investment
The utility sector has a poor reputation for customer satisfaction. Churn levels are high, especially in comparison to more consumer-focused sectors such as retail, and nearly three-quarters of EU utility companies struggle to attract new customers. But why do customers churn? Normally, it’s a combination of a poor experience and price and it’s something that should be easily rectified. Your customers may not expect 100% reliability, but they will expect you to engage in a positive and pro-active manner if and when problems arise.
But without control of your data, it just isn’t that simple.
At OpenText™ we carried out an exclusive survey in association with Utility Week, titled Understanding Digital Transformation in UK Utilities. In the survey, 35 energy industry senior executives were interviewed to better understand how UK utilities perceive digital transformation. The survey found that customer service is the business function most likely to be transformed by digital technology in the next five years and that enhanced customer engagement is one of the most important outcomes of digital transformation projects. Download the report to learn more.
Unlocking siloed legacy data to access readily available insights
One key component to achieving operational excellence is unlocking the value in available data by breaking down silos. Let’s take smart meters as an example. The data they generate provides vital insights into power usage at a granular level to facilitate better management of supply and demand. That data can be analyzed to set future rates, encourage usage during times of oversupply and drive smarter decisions around providing power to consumers at different rates.
Overcoming spiraling wholesale costs: is data the answer?
In the face of rising wholesale costs, data enables better capacity planning for the utility sector. In response to our survey with IDG, one Nordic CEO stated:
With the help of digitization, we have connected our physical assets with the virtual environment, which helps to provide efficient output and can be monitored from different locations. Demand and supply can easily be handled, and all operations can be controlled from one location with the help of centralization of data.
It’s an opinion that was echoed by a UK CIO:
…the electrical grid will underpin the future Energy network. It will enable bi-directional flows of electricity, transmit information and price signals, and ensure the optimal balance of supply and demand. …. The digital grid will generate a continuous flow of data on consumption behaviours, load variations, revisions to price signals and supply response data that will help raise the efficiency of the entire system.
The rise of the ‘prosumer’, or groups who produce and consume renewable energy, is adding to the need for data. Between now and 2040, nearly three-quarters of global investment in new power generation will focus on renewables. That growth will also play a role in the future balance between supply and demand.
Data capture will provide your business with vital historical and real-time data from sources including smart meters. That, in turn, will enable better analysis and informed decision making around the growth in prosumers.
Maximizing the potential of existing assets
Aging infrastructure is one of the biggest challenges facing the utility sector: the last new refinery built in the US was over 40 years ago and 75% of the nuclear plants in Europe are within the last half of their operating lifespan.
In my experience, digitization maximizes the potential of all assets by creating digital workflows and gaining greater visibility into operations and the potential consequences of managing risks and driving performance. That, in turn, leads to greater real-time asset monitoring in predictive maintenance and optimizing asset performance, something that will become ever more critical for our sector.
If you’d like to learn more about operational excellence, download the Four steps to Operational Excellence ebook and infographic.
If you’d like to learn more, tune into our discussion with SSEN, EDF Energy and Wessex Water on shaping the future of Utilities.