Utility Trends: 10 Things to Watch For as Utilities Evolve
The outlook for our energy future is that demand will continue to grow, while traditional supplies become more scarce. According to the 2014 Global Utility Evolution Benchmarking Study on utility trends, the worldwide demand for electricity will increase by more than two-thirds and gas by almost half between 2011 and 2035. The writing is on the wall—the infrastructure has to change in order to reliably meet this demand.
Adding to the challenge, the energy industry is changing quickly. The relationship between utility companies and our energy infrastructure is at a crossroads, and how it will all shake out isn’t clear. But the bottom line, at least according to the report, is in order to adapt, all stakeholders – regulators, utilities, customers and alternative service providers – should expect a more rapid pace of change and consider alternative approaches to capital projects.
The utility trends report predicts three possible ways that “emerging technology trends will move from innovative concepts to tomorrow’s mainstream fixtures of doing business: cloud computing and big data to help match demand with infrastructure investment, social computing and crowd-sourcing to aid engagement with communities, and 3D printing and digital fabrication to improve operations and maintenance.”
The utility trends report outlined several key strategies regarding capital projects calling for competent end-to-end project management. Insightful recommendations from the report included choosing the right project manager with the right skill set to support the project schedule and the team. Once good leadership has been established, greater community and stakeholder involvement will require more engagement and buy-in. A critical step prior to finalizing the project design and implementation, often overlooked, is customer orientation, and involvement and communication with policy and other stakeholders to help gain broad public acceptance.
As part of rethinking how utilities manage capital projects, vendor relationships are also evolving. Companies are starting to view relationships with vendors as more of a partnership and less of a supplier-customer relationship. In this new culture of collaboration, true partners often serve key strategic roles in helping utilities meet the challenges of the evolving energy system.
The utility industry at large has the potential to achieve sustainable reductions in energy delivery (transmission and distribution) without impacting reliability and quality. The percentage of infrastructure operating cost savings deemed realistic was a 5 to 10 percent reduction. According to the report, the single most important action the industry could take to reduce infrastructure operating costs was automation through technology, reliable data management and a consolidation of facilities or physical infrastructure.
Another emerging resource for savings is Building Information Modeling (BIM) and information management, which facilitate well-informed decision-making. The results? Better business outcomes, clarity, improved communication, risk reduction and ultimately greater efficiency.
Valuable cost-cutting tools also include a variety of diagnostic equipment installed on the electric transmission system and distribution grid to communicate equipment performance and signal potential failure.
The report sums up these trends, and many more, in its list of future trends to watch for. The trends in green are seen as presenting the greatest threat for traditional utilities.
10 Transformative Utility Trends
- Adjusting to a lower carbon emissions environment
- Increasing demand-side management
- Extending the useful life of aging assets beyond their originally expected life cycle
- Increasing distributed generation and distributed energy resources Despite the fact that current deployment levels of distributed generation remain fairly low, utility leaders sense its disruptive potential. In order to compete, utilities need to address, manage and integrate alternate forms of generation as they come on the grid in greater numbers.
- Responding to the increasing engagement and expectations of energy consumers As business models change, so do the roles of customers. The report predicts that customers will become less users of energy and more producers of energy.
- Increasing energy efficiency at the point of consumption
- Adjusting to changes in access to capital and the cost of capital
- Balancing real-time data access with cyber security vulnerabilities
- Responding to the aging workforce and impending retirements by capturing and transferring knowledge to a new generation of younger workers The report notes that attracting new skilled workers who are better-aligned with the new generation of smarter energy technologies will result in a more reliable grid. Wondering how to better incorporate millennials into your workforce? Download the results of our industry survey.
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Exploiting new business opportunities around home automation, commercial energy management, and other services “beyond the meter”
The trends also predict several new opportunities in the evolutionary landscape, such as technology adoption, innovation and efficiency gains. To be successful, the utilities of tomorrow will need an attitude of adaptation, should seek active engagement at all levels and take steps to ensure a workforce prepared for the future.