A Data-Enhanced Business Creates Huge Business Value

The utility of the future needs to extract value from the digital world if it is to prosper.
Published: Fri 08 Apr 2016

The level of big data in the electricity sector is ever-increasing and forward thinking utilities are beginning to understand that if harnessed properly, big data analytics can bring greater value to decision-making. This valuable data can be expected to provide huge business value to the sector, both within the customer experience and efficiency. [Digital Transformation Critical for the Utility of The Future]

Already paving the way is the telecom industry which was an early adopter of big data, leveraging it to improve efficiency, customer experience and growth. The exponential growth of data traffic, the increased importance of user demands and a staggering network complexity forced the sector to extract value in all this new data.

The utility sector now finds itself in a similar situation.[Building the Utility of the Future.]

Market transformation calls for big data solutions

With market mechanisms undergoing major transformation, competition is beginning to escalate and pricing is becoming more and more complex. There are a number of factors that contribute to the market transformation and it is these that call for big data solutions:

  • Regulatory pressure- Governments are under pressure to improve energy efficiency, and their actions have consequences for energy companies.

  • DERs - Energy companies have to find ways to manage distributed generation and storage, i.e. prosumers.

  • Increase in price volatility- The increase of energy sources like wind and solar has resulted in more fluctuations in energy access over time. The volatility is elevated further with the growing influence of power markets. Smart meters enable consumers to adjust their consumption according to price fluctuations. This demands sophisticated data analysis.

  • Threats against the service delivery- Major incidents like geopolitical events and natural disasters can cause severe damage to vital systems, in turn threatening markets, security, and people’s lives. This calls for improved resilience and intelligence.

  • Aging infrastructure- Aging technology opens the door to increased vulnerability and a lack of interoperability with newer systems. Old infrastructure needs ongoing optimization to increase longevity and cost effectiveness.

Leapfrogging into a data driven approach

The deployment of big data methods is a necessary move as infrastructures, particularly electric grids, are expected to transform from more or less linear energy systems into networked, distributed systems with a multitude of market participants and management models in play. The grids simply become too complex to handle without large-scale data analysis.

While it is not easy to build horizontal capabilities, some verticals still have a closer kinship than others. In these cases, data and analytics capabilities can be decoupled from their original contexts, modified and re-applied in other verticals.

Telecom and utilities are two such industries, with similar physical structures (geographically dispersed networks), similar properties (regulated and sometimes public) and similar challenges (improved efficiency, better customer experience and a higher degree of innovation). It is natural for utilities to use the knowledge and solutions from the telecoms sector to leapfrog into a more data-driven approach to business. [Bringing Best Practices From Telecoms To Utilities.]

Acquire big data capabilities now

Utilities must be able to support large-scale digital networks to transmit all the vital information from smart meters and other assets in the smart grid. They will need the ability to combine big data and telecom cloud capabilities to leverage the information collected.   

Like in telecoms, the development of big data in utilities is intertwined with the evolution of the IoT. The number of smart grids and the installed base of smart meters are rocketing.

Big data in the utilities sector will be dependent on a much larger number of nodes than in telecoms, demanding lots of machine power and powerful analytic models. Smart meters are not the only components of smart grids that can generate useful data for utilities companies. Data from grid sensors is essential to control the performance of smart grids. Gateways are instrumental for collecting data in the nodes.[Internet Of Things Comes To Utilities.]

SCADA (Supervisory Control and Data Acquisition) devices help control renewable sources, condition monitoring of assets and load control. Many different elements make up the smart grid.

Build customer engagement

Today, utilities must find other ways to keep and attract new customers especially since the business-to-consumer model is being challenged by the increase in prosumers. Distributed generation and storage and the sale of excess energy into the grid complicate the transaction of energy and payments. This market transformation demands more from billing and charging systems.

Big data can help utilities compete by delivering an improved customer experience and even limiting churn. It can provide the foundation which enables the creation of granular customer segmentations and it can incorporate social media into the data mix to provide an understanding of how their brand is impacted by different service variables. This helps utilities to align their services with customer preferences.  

Smart meters and smart home appliances provide new opportunities to invent solutions that build customer engagement and grow revenue. These can track consumer behaviour on different appliances, combining information with weather data, pricing information and other variables to create solutions that save energy and money for users. Data analysis can be used to mitigate price volatility on the consumer level, through better management of the risks associated with a portfolio of commercial and physical assets.

These types of data-driven innovations help to build new services, improve billing and charging algorithms and ultimately build engagement among customers in the long term. They can help to transform utility companies’ businesses beyond distributing and selling electricity.

Big data methods can give companies early warning services, detecting signs of problems that may affect customer experience in advance. The aim is to optimize daily performance and prevent issues through effective fault management.

Big data can also be used to identify the underlying issues that lead to customer complaints. Using existing data, utilities can resolve (and even avoid) bad customer experiences in the future.

Gain control, drive efficiency


The development of data-driven ways of managing operations will be necessary for utilities to operate in the future.  

With big data, utilities can develop more accurate forecasting models and distribute capacity and manage assets according to shifting needs. Early signals for asset disturbances will be identified, thereby improving grid maintenance and operations through fault location and restoration management. Utilities can then move from cyclic to condition-based maintenance, optimising expenditure.

Big data makes it possible to collect real-time data from existing grid elements to gain better control of the infrastructural assets. Ongoing monitoring of resources improves proactive maintenance actions and operations.

Of course, this improves grid reliability and stability which is of great value to customers too.

Data from smart meters and other smart assets helps utilities to understand asset usage and provides a means of asset lifecycle management. The operator can prioritize renewal of assets based on the performance of certain components over time. By combining and analyzing information such as weather forecasts, consumer behaviour and historical data from assets, it is possible to predict capacity issues and improve grid capacity planning, as well as asset lifetime.

Data can also support utilities in managing market volatility, through better management of the risks associated with a portfolio of commercial and physical assets. The improved ability to identify threats and fraud is another important benefit of big data. Data from consumption patterns can reveal illegal consumption, for instance. Big data solutions can harden assets against threats and capacity losses. These also improve resilience in physical and cyber infrastructure. Self testing and monitoring will help utilities to reveal discrepancies quicker.

Big data solutions:Implementation

Data-enhanced services are futile unless properly implemented in daily operations. The “how” and “where” to implement big data solutions is vital.

Use cases and applications are key when transforming the ‘data-driven’ from a mere buzzword to a tangible reality. Consider how big data will influence processes. Getting the most out of it across the whole organization  requires work across internal silos and good communication is key.

The vast and complex infrastructure networks demand communications technology that can be trusted in any situation. This goes for both sensors in the grids and for the communications network as a whole.

The telecom cloud, which includes Network Functions Virtualization and Software-Defined Networking components, provides a way to collect, aggregate and analyze data in real-time, enabling utilities to prevent problems and manage the customer experience.

Big data can help detect issues and find solutions, but acting on these takes courage and decisiveness so be ready to take action on these valuable insights, with the support of a reputable partner.

Choose the right partner

To manage a distribution grid properly, it is critical to know what data to use and when and it is also necessary to create efficient connection points between the electric grid and the communications grid. Utility-specific protocol support and embedded power quality monitoring capabilities add to the versatility of the devices.

Utilities should look for an end-to-end system integrator and one that combines expertise on business and technology challenges. This is an important skill, as big data analytics should be a holistic solution, covering all aspects of operations and customer management.

Further reading

Ericsson-Actionable Intelligence: Transforming Utilities [pdf]