Recent developments in the utilities industry have made one thing very clear: for energy companies, doing business the way they have until now no longer represents a sustainable course of action. This is according to Mike Ballard, Senior Director Utilities Strategy at Oracle EMEA.
With new entrants to the market such as in-home renewables and localized generation facilities growing in popularity, distributors will have to expand their services to accommodate these shifts in the energy landscape.
Data Analytics is the key to success
The key to a successful future for utility companies lies in data analytics.
While energy distributors have been benefitting from data analysis to manage their networks for years, the roll-out of smart meters and the expanding capabilities of next-generation big data appliances will enable them to implement change in ways previously unavailable to them. Even for distribution companies, insights into customer behaviour and trends will be of great value to their operations.
Smart meters will provide utility companies with a deeper vision and understanding of customer consumption patterns and that will, in turn, bring them closer to the people and businesses they serve. As a result, they will be better positioned to help customers moderate their usage, as well as their bills.
Just as importantly, with the insight they derive from smart meter analyses, distributors will be able to make better energy management decision so they can keep their own operating costs to a minimum.
Engagement is the name of the game for retailers and distributors
In the age of social media, when a conversation between one utility provider and one customer can evolve into a group discussion with thousands of people in an instant, setting a new standard for customer satisfaction and engagement will be critical for energy companies as they look to strengthen ties with the people they serve.
The analysis of smart meter data will play a major role in helping distributors to strengthen the customer relationship, not only by promoting more intelligent energy use, but also by enabling them to resolve service issues more proactively.
Customers are becoming more cost-conscious, and sustainability-minded, when it comes to their energy use. Once the smart meter roll-out takes form, customers will rely on their energy companies to provide them with more granular information on their consumption habits so they can determine where they may be overspending. They can then curb their lifestyles to keep their costs down.
The collection and conversion of smart meter data into actionable insights for customers will provide the impetus people may need to make the small changes in behaviour – replacing water boilers, lowering their thermostats by one degree in the winter, insulating walls – that can translate into significant reductions in their long term energy expenses.
Keeping “bad bills” at bay
In addition to the very visible benefits that smart meter analytics can bring to customers, they can also enable energy companies to deliver more accurate billing and drive exceptional customer service behind the scenes.
For many legacy meters there is the issue of degrading accuracy over time. Traditionally, inaccurate readings have taken anywhere from months to years to identify and then resolve. In most cases, these have been brought to the utility’s attention only when customers have flagged inconsistencies in their energy bills.
In the analytics age, the timeline for detecting metering issues has been reduced to a few days. As a result, utilities are able to detect and repair faulty devices before customers notice any effects on their bills.
By facilitating this proactive approach to meter management, analytics tools can help energy companies avoid many billing issues, thereby strengthening their customer relationships.
Avoiding peak costs on peak days
Improving customer engagement and promoting more sustainable energy use can also help utilities lower their operating costs on peak consumption days.
In many cases, network and market operators build up significant amounts of excess generation and distribution capacity just to accommodate the levels of energy use reached on a few peak consumption days and hours.
Building peaking plants or purchasing additional power on the open market can help utilities satisfy the needs of their customers during peak periods. However, these measures are expensive to implement in the current market. These costs ultimately find their way back to the customer in the form of higher energy bills.
The answer for energy companies lies once again in boosting customer engagement to drive more sustainable energy use.
At the core of this endeavour lies data analytics and strong engagement strategies, with utilities making the most of this technology to uncover new insights about how people consume. This information can be instantly shared with their customers.
Energy companies can establish more meaningful and actionable conversations with the people they serve. This will encourage both parties to work together towards reducing consumption at peak times, thereby keeping energy costs to a minimum.
An open exchange benefits all
The energy industry is reaching a tipping point that will give way to dramatic transformations.
The impending roll-out of smart meters is bringing customer engagement to the forefront of utilities’ business strategy, making it a major priority alongside demand response efforts and crucial network management efforts.
With modern big data appliances now offering energy companies such an in-depth view of peoples’ energy usage patterns, a dynamic information exchange between distributors and their customers will be central to driving more informed, sustainable consumption and a more robust network.
As engagement between all parties gain momentum, energy companies can optimize their networks whilst keeping their operating expenses in-check. For their part, customers stand to benefit from an increasingly efficient and economical energy supply.