Energy Transition-A Rebirth for Utilities

Utilities need to adjust their strategies in order to accommodate brand new business models.
Published: Thu 07 Aug 2014

Europe’s energy transition is an opportunity for utilities to develop new business models and prosper as a result. This is the view of Thierry Godart, Schneider Electric Utility President, who will be attending the upcoming European Utility Week.

New opportunities

“European utilities should view the transition as a type of rebirth. It’s a chance for them to understand their customers’ needs better and provide additional services,” explains Godart.

The change in the industry has been fast and the popularity of feed-in-tariffs caught many European utilities off-guard. The lower cost and installation of renewable energy has been a real game changer in the industry, explains Godart.

Schneider Electric has been involved with utilities for a number of years and the firm intends to support those that are embracing the transition. “Smart utilities are what we call them-they are the ones preparing for decarbonisation and renewable energy development. We have had to change our strategies to accommodate the new business models.”

Helping utilities to embrace change

Godart says that Schneider Electric is constantly improving its services and technical solutions to help utilities implement new systems and strategies.

“We are seeing a shift from CAPEX to OPEX. The sector is making use of existing assets and optimizing the need for automation and intelligence.” IT is being used increasingly to help utilities manage the business of the grid better, for instance, Advanced Distribution Management System and data management systems. Utilities must be surgical about what they are going to change in order to recover their investments.”

Utilities need to embrace self-generation and be proactive about it since this integration of energy will still need to be regulated by the utility in order to avoid an unstable and overloaded grid. Godart recommends that data collected from the self-generation process should be used by the utility to promote its case. “Data should be clearly communicated to these customers so that there is a better understanding of how the energy is integrated.”

Utilities can also use data management to provide a better service to their customers and should be compensated for this data assimilation and analytics.

According to Godart, utilities have become a lot smarter with controlling customer consumption. Today, driving behaviour has become prevalent. Also, by adopting open standard technology with one gateway, controlled by utilities, customers’ usage is better-managed by the utility without affecting the customers’ comfort. Advanced demand management and response can be alternated to maintain grid stability without affecting customers’ comfort levels.

Challenges ahead

The transition is not easy for utilities-skills gaps are a major problem for utilities as they change their technology and business systems to stay ahead in a very competitive environment. Customers are now no longer just consumers-they are big role players when it comes to energy production. For this reason, consumer engagement has become a priority and new strategies and regulations have to be developed.

Utilities are expected to reduce operating costs at a time when grids have to be upgraded and systems, developed. Godart says that utilities must plan how to reduce costs using modern optimisation. He expands, “This cost-saving will go towards value-added services which will help to maintain the grid. This is key as it will free up utility staff, as well as much-needed finances.”

Utilities also have the responsibility of keeping tariffs low so as to attract large industrial customers into the country.

In conclusion, we asked Godart what he intends to achieve at the European Utility Week conference and he said that he looks forward to meeting up with new potential customers and learning the sectors’ current and growing needs during the energy transition. “Schneider Electric’s aim is to improve the efficiency of smart utilities and that will be our message at the conference.”