The Smart Step into the Future for Energy Utilities

Smart technology is enabling utilities to adopt a multi-dimensional role, writes Pieter Coetzee, Senior Director, Smart Grid Solutions, Itron.
Published: Fri 07 Nov 2014

Reducing the EU’s dependence on foreign energy sources is currently at the top of the European agenda and the discussion in Brussels is shifting from generation to demand and a point of leverage.

A recent report by Greenpeace found that if the EU adopted a 40 percent energy efficiency target for 2030, as called for by the European Parliament, it could reduce the need for energy imports by more than 45 percent above current plans.

By empowering people to better understand how and when energy is used, Europe can master the most cost-effective, low-carbon and secure energy resource available – energy efficiency.

The multi-dimensional utility model

Utilities across Europe are adapting their business and organisational models to invest in smart infrastructure. This refers to technology that enhances resource efficiency by capturing and analysing data and usage patterns on demand in order to bring customers off-peak and to increase utilization of intermittent renewable energy sources for delivering baseload requirements. This is also creating new opportunities for the traditional utility. For the first time, the move to smart technology is enabling utilities to assume a multi-dimensional role. For example, Bloomberg New Energy Finance suggests that utilities can become capacity providers rather than just electricity providers.

Aside from new business opportunities brought on from regulatory interventions and emerging markets, there are two core areas that utilities need to focus on. Firstly, maintaining stable and reliable distribution, and secondly, unleashing the value of the new breed of customer: energy producers and consumers, or “prosumers.” The first involves enabling more renewable energy to be absorbed into the grid, whilst using information and communications technology (ICT) to help balance and stabilise local distribution grids. The second also relies on smart infrastructure to allow peak demand to be shaved or shifted to hours with lower load, thus reducing the need for high-cost peak capacity.

To make renewables work, utilities need to be able to quickly backfill capacity shortages when the sun goes behind a cloud or the wind stops blowing. To achieve this, everything from consumer engagement to innovations such as energy storage and demand response is needed. But as the first step, accurate energy measurement, including voltage monitoring, load forecasting tied to weather data, and a near real-time link to customers and grid assets is essential in making renewables work for the grid as well as for the utilities and prosumers.

The greater the role of ICT in the management of distribution networks, the greater the value of data generated at the household-level. By acting as an aggregator, utilities have a major opportunity to turn big data into meaningful insight. This feeds into strategies to bolster customer service and decrease investment risk. Smart energy management technologies help utilities and distributors forecast and manage loads, while improving service quality and customer satisfaction.

With the data analytics provided by smart technologies, utilities can now send and receive information electronically about energy consumption and also provide real-time information to consumers. This significantly increases the accuracy of billing, allowing energy users to see how much energy is used on a day-to-day or hour-by-hour basis, giving them more control over energy use and costs.

By recognising and pinpointing patterns of domestic energy use, utilities can engage with customers about where they can save money. Using the analytics drawn from big data, utilities can provide incentives to move energy users “off peak” and flatten the demand curve by gaining a better understanding of how and when energy is being produced and used. This means applying technology to engage consumers and more closely aligning energy demand with capacity and availability.

Building a flexible smart grid

Certainly, there are myriad opportunities for utilities to transform their business models using smart technologies to improve the reliability, efficiency and flexibility of the grid. According to the Itron Resourcefulness Index, 94 percent of global utility executives say the industry needs transformation and nearly 75 percent believe investing in big data tools is critical to modernising infrastructure.

As utilities make these investments, it is vital to safeguard the reliability, resiliency and certainty of supply. As utilities face up to the challenge of bringing new technologies on stream, they need to put in place infrastructure that supports those vital requirements whilst also creating new opportunities for the future.