Energy prices are rising in an economy that continues to weather the fallout of a global financial crisis and as regulators pressure utilities to lower costs, there is a compelling need for utilities to do more with less.
Traditional challenges—such as the reliability and resilience of supply and energy security—remain. In addition, utility companies are managing a whole new level of complexity, as they balance consumer concerns around rising electricity costs (for example, in the United Kingdom gas and electricity prices have doubled over the past seven years) while embracing evolving distributed generation technologies.
As a result, they are being driven to innovate and transform using digital, says Stephanie Jamison, managing director for Accenture Smart Grid Services in Europe, Africa and Latin America, who will be attending the upcoming European Utility Week.
In response to this move toward a digital grid, Accenture conducted an executive survey among utilities executives worldwide involved in the decision-making process for smart grid-related programs in their companies. Accenture analyzed the responses of 54 utilities executives in 13 countries to help determine the priorities for distribution companies in the short and long-term as they transition to a more digitally-enabled grid.
In an exclusive interview, Engerati asked Jamison a few questions about the research results and what they reveal about the future of smart grid in Europe.
Digital grid—many benefits
By transitioning to a more digitally-enabled grid, utilities can gain by being able to better manage the increasing complexity of the energy mix, as well as improving grid stability and business continuity, explains Jamison. As an example, utilities are finding that the analytics associated with smart grid deployments have the potential to significantly reduce costs, improve asset (grid) utilization, defer capital cost and increase control.
Consumers also stand to benefit. As assets are better managed, consumers can benefit from a better service delivery, reduced interruptions and more choice.
In addition, technology innovation may help to reduce environmental impact. For instance, more efficient space and water heating or greener transport methods such as electric vehicles.
Prioritising the smart grid—a United States and European perspective
TheAccenture survey shows that the smart grid is being embraced globally. Everyone seems to agree that the smart grid is a natural extension of the ongoing upgrades of the electricity network.
Varying local energy challenges are nevertheless driving differing priorities for deployment, explains Jamison. When respondents were asked to comment on the importance of the different value levers in deploying smart solutions, 100 percent of the respondents in Europe felt that accommodating distributed sources of energy was important or critical—-in comparison, 67 percent of the US-based respondents agreed.
Eighty percent of the US-based respondents viewed the reduction in metering costs and retail customer service as important and critical in the decision to deploy smart solutions. Half of the European respondents agreed.
There were some variations geographically, too, when Accenture asked respondents which smart solutions will be the highest priority for their company by 2020. While 60 percent of the US-based respondents identified analytics (that is, predictive and control analytics using data from intelligent electronic devices), just 41 percent of the European respondents agreed. Whereas in Europe, 71 percent said that distribution sensing and automation was important, versus 50 percent of the US-based respondents.
Accenture is proud to be a supporter of the GRID4EU project, one of the largest smart grid projects funded by the European Union, with a total budget of €54 million and financed up to 50 percent by the European Commission. The GRID4EU project is designed to showcase current smart grid technologies and techniques to Europe, and to the world.
GRID4EU involves exploring a suitable way for Distribution System Operators (DSOs) to dynamically manage electricity supply and demand—to integrate renewable energy and empower consumers to become active participants in their energy choices.
Says Garaude Verdier, GRID4EU coordinator, “Ultimately, GRID4EU could increase network reliability, flexibility and resilience, cost effectively. Tightly aligning with GRID4EU objectives, Accenture has worked with the alliance on the development of a global results-sharing strategy to maximize the impact among the European smart grid community.”
Analytics is becoming part of the core business for most utilities, says Jamison. Enhanced analytics is considered an essential benefit of a more digital-enabled grid, whether to support grid operations (96 percent), asset management (92 percent) or outage management (85 percent). However, there is something of a gap between desire and delivery.
The Accenture survey shows that only one in four respondents believe their companies are very well positioned to compete for analytics skills in the market and the same number feel they are poorly positioned to compete.
This range of competency is no doubt linked to access to skills, which the survey respondents identified as a highly critical success factor to address the analytics opportunity. Ninety percent of respondents said that access to the appropriate IT skills, to execute their data strategy and implement analytic solutions, is critical and 84 percent identified the availability of data science skills as important or critical.
Impact of IT-related capabilities
According to Jamison, the skills shortage is not just limited to analytics. She explains, “What we are seeing at Accenture is that IT capabilities for the industry are stretched—and are likely to need to extend further as the business demand increases to adopt new IT capabilities and realize new benefits.”
The survey shows that 90 percent of respondents say access to the appropriate IT skills will be important to manage the large data volumes and integration. Specifically, there is a major requirement for improving IT and OT integration.
Jamison suggests, “Utility companies must combine vast volumes of data from smart meters and grid-sensing devices with enterprise and operational data to drive improved asset management, grid operations and customer service through advanced grid application and smart grid analytics. In addition, utilities need to adopt an integrated architecture across all smart grid layers, from field devices to grid control, if they are to successfully integrate distributed energy resources.”
To this end, Accenture and Siemens have come together to launch OMNETRIC Group. The joint venture went live in April and is developing and delivering integrated smart grid solutions for improved grid reliability and efficiency.
Underestimating the risk of technology disruption
According to Jamison, Accenture views technology disruption at two levels: the energy-related technologies that are changing the energy mix and the digital technologies that are changing the way solutions can be architected and delivered, for example, mobility, cloud and analytics.
These two types of disruptors are, in fact, inextricably related and the success of distributed energy sources is in part dependent on the adoption of digital technology solutions.
For the purpose of the survey, when Accenture talked about technology disruption, they referred to distributed energy resource technologies. When they asked utilities executives about the impacts of disruption and potential increases in grid faults by 2020 (that is shorted circuits, bi-directional power flows or power quality issues), more than two thirds in Europe (63 percent) said they did not expect any increase in faults. Globally, the number drops with 37 percent of respondents not anticipating increases in faults with respect to distributed renewable generation and 14 percent not expecting fault increases due to plug-in electric vehicles.
Currently, Accenture research is taking a deeper dive into the question of the integration of distributed resources in the distribution network, evaluating their impact on expected revenues and business models.
Says Jamison, “We have a body of research and leading practices we can share with utilities, wherever they are located in the world. We look forward to sharing some of these upcoming insights at European Utility Week.”