A lot of news about the utility death spiral continues as solar adoption grows. Investors are also signaling for and worrying about expected changes in the utility business models. I find it exciting for the utility sector in two ways. First, the challenge presents an opportunity to create better regulatory models, which benefit consumers, and obliges utility companies to improve their brands. At the moment, utilities, especially in the regulated regions, have no incentive to become consumer focused. Second, forward-looking utility professionals are creating dynamic and agile environments with the use of analytics, cloud, mobile and social.
We’ve heard about the consumerization of IT and are seeing it unfold in other industries. Utility companies are being forced to adopt consumerization of energy and IT even if they’re not ready. Here are a few reasons:
- The new workforce will want utility companies to be tech-savvy – New talent is looking for new ways to internalize the use of information technology. The aging workforce and lack of young talent’s interest should be as alarming as solar consumerization.
- Customers are active and “pulling” utility companies – Consumers want to communicate over social media channels. More consumers are accessing web portals via mobile devices today than in the past two years. In addition, products like Nest thermostat (Google) will gain more appeal in coming years and make consumerization of energy a reality.
- Cloud services are becoming real – Most utilities did not even want to hear the word cloud two years ago. Today, tight operational budgets, rising business expectations to deliver results, and a lack of new skills are forcing utility decision makers to look at cloud services (as long as they can address NERC CIP requirements).
- Utility companies are becoming proactive - Smart meter data has opened a new door for utility professionals to improve existing processes. Billing, forecasting asset health, demand response, customer engagement, and outage management used to be adhoc processes and required immense work. Utility professionals are already on a path to automate these processes and running into new worries they did not initially think about relating to reliability and customer service.
Creating the innovation cycle for utility professionals
There’s an immense opportunity for solution providers to create an environment that takes utilities down a path of innovation. Projects around the globe reflect much diversity and reflect the many varieties of the “smart grid vision.” I expect that both solution providers and utility professionals will work together to reinstate threats with new opportunities together. The idea of creating an innovation cycle is a continuous and gradual process. Smart meter data provides the first hook to this innovation. Stay tuned for more thoughts in regard to using analytics and mobile for this innovation cycle.
I look forward to hearing your thoughts on how you're creating an innovation cycle at your companies.
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