Covid-19 Is Accelerating the Shift Towards Digital At Utilities
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By now, we are all used to Zoom calls and cloud productivity software to manage our work days. But the pandemic shutdown is also resulting in other wide-ranging operational changes at electric utilities. According to a Reuters report, the Covid-19 shutdown has accelerated the digital transformation of electric utilities in Europe.
An example is Germany’s E.ON which has increased use of drones by 50% and uses more image-recognition software for inspection of high-voltage power lines. The utility is also building a video-conferencing app, similar to Apple’s Facetime, to enable its line workers communicate with customers for simple problems - such as a rudimentary fault in smart meters - that do not require customer visits. Electric utilities in Europe are also spending on Platform-as-a-Service (SaaS) solutions in which the cloud application is available as a managed platform, which the utility can tap into for results.
By some accounts, utilities in Latin America are also stepping on the gas in digital transformation. In addition to reducing cost and generating operational gains, some utilities there are using digital initiatives to springboard their way into other industries.
And, what of utilities in North America? Regulatory impediments continue to hamper digitization efforts. An example is the absence of uniform treatment for SaaS applications as capital expenses across various jurisdictions. This has been the case even when rapid growth of Advanced Metering Infrastructure (AMI)) has increased the need for pertinent regulation that enables payback for installation of these devices.
A June post at consulting firm McKinsey Inc. highlighted additional ways in which utilities can pursue digitalization of their businesses during the pandemic. Advanced analytics can help identify customers who are likely to become delinquent with their bill payment and help utilities plan their revenue expenses accordingly. Digitalization efforts during Covid-19 can also help utilities build business to consumer (B2C) pipelines. For example, utilities can use online marketing channels to attract more customers to their service. In Europe, where customer churn rates can be as high as 25 percent, online channels have already become a prevalent avenue for marketing. Asset maintenance can also be conducted remotely using software solutions.