While internal digitalization will help improve the bottom line, electric utilities must seek new business opportunities to combat the downward trend in revenues and profits. Electric utilities must understand their strengths and weaknesses to position themselves to capitalize on new markets. Baselining key revenue and cost drivers will help companies track progress and measure results as they digitalize their businesses. This will provide a roadmap for setting realistic goals that can be adjusted as results are proven.
The following are a few reasons it is imperative businesses evaluate their current state seek new opportunities:
Reduced electricity consumption has flattened revenue growth projections. New customer revenue sources must be discovered by uncovering where and how energy will be used in the future.
Distributed energy resources and storage solutions are fundamentally changing the electric grid. Electric utilities must change existing business models and become technology builders.
Declining cost of renewable technologies and batteries fueled by regulatory incentives is changing power generation at its core.
Globalization is creating increased competition. Here’s an example of how a Dutch company is transforming communities across the Netherlands. As regulators open the electricity markets to competition, energy investors with infuse cash into technology projects to drive higher ROIs.
Low prices for computational power are enabling improved analytics and learning models, thus fueling opportunities in Industrial Internet of Things and mobile technologies.
Businesses must look at themselves as hybrid technology companies at their core because only then will they build the necessary infrastructure to adapt and see far enough ahead to capitalize on golden market opportunities. This is where the true “Blue Oceans” (vast marketing strategies in an unknown field) lie. They are not buried in the research reports of the “Big 4” (PriceWaterhouseCoopers (PwC), Ernst & Young (E&Y), Deloitte, and KPMG) consulting firms. Electric utility leaders must get out of the office and hunt for big problems to solve that only their expertise, data and capitalization can quickly bring to market.
In an effort to meet new customer needs, the electricity sector must continually improve their infrastructure to provide reliable service to all customers. Reinvesting in an aging, outdated grid is bumping up against flat or declining retail sales due to energy efficiency improvements and distributed generation, primarily rooftop solar that has become quite popular. So, utilities across the country must stabilize their revenue streams while reducing risks, such as equipment, downtown. Identifying areas of high ROI/ROE, and then implementing predictive maintenance approaches will go a long way to maximizing efficiencies and the bottom line.
There are deep wells of potential to be developed before and beyond the meter, such as digital field worker platforms, advanced network control systems, smart cities and homes, distributed energy technologies, and a host of other innovations. Electric utilities must unleash the expertise in their companies to recognize and solve the problems of the future and learn to build business models around these teams and solutions. They must become adept at building innovative teams and working with startups and technology partners to develop technology and not simply a user.
Karonn Blue P.E., PMP is an Industrial Control System (ICS) Engineer specializing in helping organizations successfully design, secure and integrate robust ICS solutions. After spending over 15 years in engineering, leadership, and consulting for industrial control systems, I know the challenges faced by owners of critical infrastructure and what it takes to ensure these systems remain safe, reliable and compliant. Our team continually seek ways that technology, global best practices, and strategic partnerships can help protect your assets as your business and threats continually evolve. If you have questions or to set up an appointment to discuss your organization's SCADA/ICS situation and needs, contact me at: kblue@LLBLUEeng.com