The paradigm in which we have all lived in an electrified world is changing. The convergence of technology, changing business models, and increasing customer expectations means the way utilities have operated for the last 100+ years must change. Further, this change must embrace where the operations side of the business – “certainty” – runs up against the customer side of the business – “confusion.”
On the operations side of the business, the BRIDGE Energy Group® – 2017 BRIDGE Index™ reveals how utilities are moving forward to provide more certainty. A few of the highlights from this study demonstrate change in grid operations especially. To note:
- 52 percent of utilities surveyed are developing a grid modernization plan; this is up from 41 percent in 2016.
- Utilities’ top priority for grid modernization is maintaining or improving reliability; 2nd is improving operations and optimizing asset performance.
- The top three reasons for implementing a microgrid include improving reliability and resilience for a group of customers (e.g., a feeder or substation), integrating distributed generation, and improving reliability and resilience for a critical customer.
So, while the operations side of the house has definitive plans and defined outcomes, the picture for customer operations is not as clear. Why is this? Grid operations are in-house where there is a great deal of control over the factors of success. Customer operations, on the other hand, happens outside the walls of the utility and runs into changing market conditions and customer expectations. Consider the following:
- Residential solar power continues to increase. While accounting for only approximately 1.5 percent of power generation (according to a report published by OhmHome), the decrease in solar prices continue to drive growth. California leads the pack with residential solar penetration at 14.5 percent.
- Energy storage prices are down 73 percent since 2009, creating more opportunities for customer choice.
- Customers will continue to install roof-top solar, and the flow of electricity from residential panels onto the grid will grow accordingly, creating new operational and customer challenges for utilities.
- Electric vehicle (EV) sales in the US grew 37 percent in 2016 (Forbes); much like the examples above, EV growth creates more customer choice and operational challenges.
The requirements for managing the emerging customer model heavily driven by renewables, energy storage and electric vehicles will continue to evolve. This evolution will encompass not only how the utility engages with the customer, but will likely also radically change the landscape of how the grid operates, ultimately affecting the utility's underlying business model. The distribution operations functions of a utility might be unrecognizable in a few years.
Analytics will help utilities navigate this radically different landscape in the coming years. Consider that 97 percent of utilities responding to the aforementioned Bridge Index expect increased analytics from grid modernization. This movement towards predictive operations and maintenance of the grid is just the beginning. Consider how energy flows and customers interaction with the utility will change. Power flows from residential generation (solar enabled with storage) will create millions of small energy transactions at the distribution grid level. All of these transactions will need to be optimized.
This new landscape screams “analytics!” Managing the grid predictively and managing these new energy transactions will be data-driven. Utility leaders that recognize this direction of the industry AND the need to implement a platform and systems that can manage these data-rich operations in a predictive environment will be the winners in the new utility landscape.
For a closer look at how utilities see analytics driving change and evolution in their business, check out the SAS Global Utility Survey results.