Managing the deluge of smart grid data.
Responding to the increased demand for customer intelligence.
Implementing analytics for grid optimization.
These were just a few of the topics covered at this week’s inaugural “Utility Analytics Summit.”
Utilities have been grappling with implementation of smart grid devices for several years and are now feeling the pain of significantly larger data volumes than they have ever seen before. Sensors along the energy value chain – from your smart meter on your house, to sensors along the transmission and distribution lines, to new distributed energy resources – produce a higher volume and velocity of data than utilities have had access to before.
This data can be used to fine-tune assets to prevent failures and extend their lifetime capacity. Or improve the integration of green power while maintaining reliability. Or isolate power outages and map the point of failure. Or design energy efficiency programs that reduce a customer’s energy bill. Or detect electrical losses due to fraud or technical problems along the power lines. Or….. you get the idea. A myriad of business benefits await the utility than can collect, manage, and analyze the data at their disposal.
Just how close are utilities to realizing the benefits? I noted a few areas where utilities are making significant progress and others that still need improvement. SAS has experienced transformation similar to that facing this industry before through our work with retailers, banks and insurance companies. Given our collective experience, I noted a few grades on a readiness scorecard for utilities.
Utility analytical adoption report card
Fraud modeling: B+
Several utilities are leveraging detailed smart grid data to track down energy theft. Today’s best practice is to build models based on known fraud cases. However, the next evolution is to allow intelligent systems to find unknown patterns of fraud that would have gone unnoticed even to the trained professional.
Peer-to-peer best practice sharing: A+
Since most of the energy providers in the US operate in regulated markets, competitive threats do not hinder information sharing. Among the delegates at this conference were large electric utilities, municipal water utilities, deregulated energy retailers, industry consultants and solution providers.
Social media: C
In a panel discussion titled “Analytics in 2020,” there was no mention of social media. When probed for insights into how utilities might leverage this vast resource, whether for passive sentiment analysis or active customer engagement, the panelists fell silent. Without an active social media strategy, utilities are undervaluing this resource and will be disconnected with their customers.
C-level support: A-
In last year’s research project with Energy Central, we asked executives why utilities are not sharing more information internally. The most common response was that there are “Too Many Barriers to Change.” This was validated by many discussions at the conference. Those utilities who had CIOs in attendance are the real standouts in the progressive utility space, such as OG&E and CenterPoint, demonstrating that executive engagement is critical to success of any project.
Organizational Alignment: B
One of the most well-attended table discussions within the Customer Analytics workshop was on the topic of “aligning analytical competency with business strategy.” Delegates shared frustration with lack of clear communication around the utility’s business strategy, let alone how that strategy related to customers. Most recognized a shift towards data-driven decision making, but noted that there is a power struggle between IT and the lines of business. Recruiting, training, and retaining analytical talent is a significant challenge, but one that they think would be easier with improved organizational alignment.
Data Management: B-
Most current approaches to managing data involve yet another data mart. While this may return quick results for a specific query (i.e. “which meters returned a zero value on Friday, Saturday, and Sunday”), it skirts the issues of data governance, inconsistencies, and a “single version of the truth”. The upside is that comprehensive data management is high on the corporate agenda.
The conference was an exciting gathering of like-minded utility analysts and managers. Congratulations to Mike Smith and his team at the Utility Analytics Institute for putting together the first “Summit.” I anticipate that these delegates will continue to interact and learn quite a bit from one another!