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Utilities Should Start Small to Gain the Huge Benefits of Data Analytics

For utility executives, the idea of analyzing big data may sound like a big hassle. While energy providers are accumulating data from a wide variety of resources — including smart meters and other grid sensors, as well as weather and location sources — many are stuck when it comes to putting it to use. Yet, according to a recent Forbes article by Stephan Zech and Christophe Guille, analytics can help in three ways: by reducing costs, improving reliability, and enriching customer engagement. The secrets to reaping these benefits are (1) overcoming the initial challenges, and (2) starting with one key analytics project to build competence.

Significant Benefits

The potential benefits from using data analytics can’t be denied. Zech and Guille write, “Analytics can help large utilities save up to tens of millions of dollars in capex and operational and maintenance expenditures by helping them improve operations…, optimize their capital deployment…or understand their procurement better.” They add that the use of analytics can also help energy providers know when to replace aging equipment, thereby preventing later outages. Finally, analyzing customer data can help companies understand how customers use energy, which can provide the information needed to develop products and programs that enhance energy efficiency.

Overcoming Challenges

Yet, gaining these insights doesn’t happen overnight. Companies may face a range of obstacles before they can make the best use of their data. “The most significant challenges are with resources, change management, and data governance,” states Lauren Callaway, Senior Content Manager, Utility Analytics Institute at Informa, in an interview with Metering & Smart Energy International.

“In terms of resources, probably the biggest challenge is attracting analytics talent,” adds Callaway. Even then, companies may find it difficult to convince people they need to change the way they’ve always done their jobs. Finally, states Callaway, “Because utilities are traditionally very siloed…enterprise data governance for analytics becomes extremely complex.”

Many resources are available to help utilities make the transition to a more analytics-based operation. For example, Callaway’s organization, the Utility Analytics Institute, provides information to companies new to analytics, including a community where participants can ask questions and exchange best practices. This year’s annual Utility Analytics Summit will include Analytics Roadmap, Customer Analytics, Utility Operations Analytics, and Generations Analytics tracks.

Getting Started

Zech and Guille note that, for company leaders who are ready to explore analytics, the first step is to “experiment with the tools they already have.” They add, “Focusing on a single area can help in several ways. First, it focuses the organization on exploring advanced analytics…. Second, the initial data engineering represents the heavy lifting that can produce results elsewhere in the organization…. Finally, a single effort can begin to generate momentum.”

One utility used data to reduce the amount of time it took to restore power outages, and provide customers with more accurate time predictions. “Their new model doubled their accuracy, resulting not only in more efficient deployment of field staff but also in higher customer satisfaction scores,” state Zech and Guille. They add that initial efforts may include “existing data and off-the-shelf analytical tools.” As companies build their analytics skills, they can branch out into new ways to collect, organize, and analyze the data; and they can hire skilled people to meet their analytics needs once they have a better idea of what those needs are.

Using analytics to improve business and service delivery may present some challenges at first, but doing so can yield impressive results. Therefore, it’s worth the attention of every utility, and will become even more so over time. As noted by Kim Gaddy, writing for T&DWorld, “While buzzwords come and go (e.g. 'big data'), analytics is not a fad that will soon fade away.”

Karen Marcus's picture

Thank Karen for the Post!

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Duncan Brooks's picture
Duncan Brooks on Mar 7, 2018 6:27 pm GMT

I like how this article illustrates that we, "utilities", are all in the same space (or have been in that place); it is a journey to the rewards of data analytics - there is no short cuts.

Karen Marcus's picture
Karen Marcus on Mar 22, 2018 9:44 pm GMT

Based on my research, I think that's exactly right, Duncan. I hope it's helpful for companies to know this doesn't have to be an overnight transition, but can be more of a gradual process based on resources, comfort level, etc.

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