Throughout history, utilities have been a key pillar of the economy, from providing basic electricity and access to water to powering our ever-connected modern lifestyles. As the global population continues to increase, the demand for these precious resources will increase as well – all while governments and lawmakers are mandating lower carbon emissions and consumers are demanding greener alternatives and control over costs. It is clear that change is afoot in the utility industry and utilities have a unique opportunity to drive modernization and revolutionize the way energy and water resources are used and managed.
Further illustrating this opportunity, Itron recently released the third annual Itron Resourcefulness Index, a global benchmark for energy and water resources management. The report consists of a perception survey of utility executives and consumers across the globe as well as country-by-country rankings based on 35 macro indicators across three core pillars: effectiveness, efficiency and sustainability.
In its largest study to date, Itron surveyed more than 2,000 combined utility executives and informed consumers in 16 key markets around the globe. Insights this year point to the growing importance of the utility industry’s role in leading a transformation in managing finite resources.
Key findings from this year’s survey
1. Utilities are deploying technology that can lead the age of the Internet of Things and smart cities
Deploying smart technologies provides the base for modernized grids and networks. These technologies not only provide utilities with real-time information, but also serve as the foundation for other applications that build a smart city such as smart streetlights and cross walks, electric vehicle charging and solar energy management. Investment in technology not only allows utilities to become more effective in delivering services to their citizens, but also provides the opportunity for utilities to play an integral and leading role in creating smart cities of the future.
2. Utilities are turning to technology to address the changing business landscape
Of those surveyed, 74% of utility executives viewed the changing business model as an ‘urgent’ or ‘growing concern.’ While utilities are working hard to keep up with a shifting industry landscape, they should consider newer and faster ways to deploy technology, including software as a service (SaaS) solutions and managed services, which allow end-to-end network management and data collection along with flexible field deployment and analytics to quickly lead to energy and water supply efficiency.
3. Consumers want utilities to do more to connect the dots for them
This year’s survey found an interesting disconnect between utility executives and consumers. A total of 69% of utility executives stated that they were excelling in communicating with their customers, while only 25% of consumers felt satisfied with the amount of communication from utilities about changes in the industry. Given this, utilities have an opportunity to engage with consumers in more meaningful ways through access to detailed data and online tools.
4. It’s not about big data: it’s about the right data
More devices are being connected to the grid every day and massive amounts of data are being generated. Results showed that 30% of utility executives have and use the tools to manage big data; however, 36% noted that they have the tools but currently do not use them to manage big data. To ensure they have the right data at the right time, utilities should deploy analytics that accelerate and improve decision-making and shorten reaction times. This allows them to interpret consumption patterns, quickly identify problems such as theft, and more efficiently forecast and allocate resources.
5. Cybersecurity continues to be a concern
In the survey, 75% of consumers stated that data privacy and security is a concern, while only 64% of utility executives said they were equipped to protect against physical and cyber-attacks. In this day and age, cybersecurity is an ongoing, multifaceted effort on many fronts to continually improve system security. Utilities that haven’t done so should consider upgrading their systems as today’s smart metering systems have cybersecurity features built in at both the device and the network level that render the ‘threat profile’ very low.
6. Gas and electricity grids grow together
An emerging trend for energy utilities is combining both gas and electric grids. In fact, 66% of energy utility executives said electricity and gas grids will grow together. This is important as gas can play a role in storing surplus renewable electricity in the form of hydrogen and methane. As technologies become more prolific, using one network across an entire city is becoming more of a reality.
7. Addressing wasted water is a priority
Across the globe, communities are facing unprecedented drought conditions – only complicated by the fact that, according to the International Water Association, 25% to 50% of the total water supply in the world is lost due to leaks and aging infrastructure. This is clearly a concern that the industry understands – nearly half of all water utility executives surveyed stated that leak detection technology was at the top of their investment wish list. To address this lost water, utilities should not only invest in technology, but also the software and services that can provide real-time information.
8. Government has an increasing role in shaping resourcefulness
In previous reports, utility executives have agreed that government regulations – and potentially new regulations – can impede the much needed modernization of the world’s energy and water grids. This year, 53% of utility executives said government regulation delays investment. However, in the US, states that passed clean energy and efficiency mandates tend to invest more heavily in infrastructure modernization, serving as a proof point that functional policies can benefit consumers and utilities.
9. Next generation workers are needed
A total of 71% of the utility executives surveyed cited attracting the next generation of workers a “growing” or “urgent” concern. Over the past two years, this issue has become a larger concern for utility executives as a large portion of the workforce nears retirement age. As utilities continue to face these realities, they’ll need to focus more heavily on recruiting the next generation of workers.
10. Everyone needs to take action to create a more resourceful world
Resourcefulness is an important issue for everyone. However, both utility executives and consumers believe the other has the greater ability to improve resourcefulness. Utilities can play a key role here in ushering consumers along by improving their programmes and processes, enacting demand response and peak energy rebates, embracing innovative technology solutions and continuing to educate and communicate with consumers about how they can do their part to assist. For consumers, they can participate in demand response or peak energy use programmes provided by their utilities or ask for them if they don’t exist. Additionally, both groups believe that regulators have the ability to enact regulation that helps make changes specific to the resourceful management of energy and water resources.
Energy and Water Resourcefulness Indexes
Further boosting the global need to address energy and water management issues, Itron created two indexes to assess the resourcefulness of the 16 countries surveyed. Resourcefulness has been defined as the ability to prioritize and deliver on the pillars of effectiveness, efficiency and sustainability:
• Effectiveness is the ability of a country to provide reliable and consistent water and energy services.
• Efficiency captures the extent to which a country provides water and energy services while minimizing waste.
• Sustainability measures the impact on the environment from the country providing water and energy services.
The energy index found that developed countries rounded out the top five this year. While each country has different attributes that bring them to the top, all countries are able to provide reliable and consistent energy sources. The top five countries are the United States, Germany, Canada, Japan and France.
For the water index, all of the top countries are taking steps to better manage and use water resources. This is likely attributed to the fact that with unprecedented drought conditions impacting countries across the globe, leaders are realizing that they cannot afford to lose any water in the distribution system – where currently almost one third of the water supply is lost to leaks. The top five countries are Australia, Japan, Germany, France and the United States.
The demand on the world’s finite energy and water resources continues to grow; this is no secret. By measuring and benchmarking the global management of energy and water resources, Itron hopes to highlight the importance of resourcefulness and help everyone understand their role in making it a reality. This year’s study emphasized the critical role utilities have in leading the way to a more resourceful world, and urges them to seize this opportunity and adopt new technologies to reduce waste and work to create a more efficient and connected system that fulfils the needs of our world.
This article first appeared in Metering & Smart Energy International, Issue 2 2016.