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Electrical utilities can look beyond their own industry for ‘innovation inspiration’ and avoid being outrun by market changes

Adrian McNulty's picture
VP Utility Solutions IQGeo

Experienced Energy Industry professional with 25 years hands on experience from Generation to Distribution.

  • Member since 2022
  • 1 items added with 316 views
  • Jul 29, 2022
  • 316 views

Changing usage patterns, rising demand for electricity, and increasing decarbonization efforts have made managing the evolving state of electrical networks a greater challenge than ever before. While utilities understand that they need to rethink the traditional network design  and determine if the technology and processes in place are fit for purpose for the grid  of the future, many are still grappling with how to address this challenge.

As industry players continue to rethink their strategies, we are starting to see an impact on consumers in the form of more frequent outages and increasingly expensive services. If electrical grid  operators fail to prepare adequately for the changes ahead, they risk compromising the safety of consumers, damaging their own reputations, and being overrun by emerging competitive forces.

Traditional systems and business processes, such as those based on legacy GIS applications, are  compromising the agility of teams that plan, design, construct and operate the grid.  However, other industries have undergone similar transformations which can serve as an interesting model for innovation. The telecom industry is a great example as it has undergone monumental changes with the deployment of fiber and 5G, and it is arguably further along the digital transformation journey.

Telecom operators have found themselves in a highly competitive market, compelling them to constantly review their technology choices and use innovation as a strategic asset to outrun their competitors.

So, what can electrical utility companies learn from telecoms companies?

Model different scenarios to prepare for every eventuality

Telecom operators have moved from copper to coaxial, then coaxial to fiber. The requirements and architecture of the network have changed several times through this generational evolution and the industry has responded with the latest network management technology.

This network revolution parallels the challenges currently being faced by electric utility operators. It’s a dynamic time when it comes to energy production, distribution, storage, and consumption. Increased electricity demands from rising use of electric vehicles, combined with a strong focus on achieving net-zero carbon goals, and other social and economic drivers means that usage patterns are constantly changing.

Many innovative providers in the telecom industry understand that creating an accurate digital twin of their network is fundamental to enabling their transformational ambitions. To embrace evolving technology and meet changing consumption patterns, electrical utility companies need to adopt a similar approach.

Telecom companies have already taken the first steps in the process by abandoning the centralized legacy GIS orthodoxy, relying instead on modern decentralized solutions that provide key stakeholders with the agility to adapt to rapidly changing networks and processes. Electric utility companies can benefit from the experience of the telecom industry by constantly evaluating whether their technology is meeting business needs, and if not, rethink their strategy to remain competitive.

Direct and indirect competition in the utility sector is growing rapidly, with some larger organizations creating their own electricity networks, and if operators don’t adopt this culture of innovation, they could begin to lose their most lucrative and reliable market share to new market participants and existing competitors.

Don’t make important decisions based on data from disconnected systems

Like all other network operators, the electric utility industry is facing increasingly frequent and severe natural disasters and extreme weather events, which according to The UN’s Report on Disaster Risk Reduction, shows no signs of waning. Real-time network situational awareness is therefore more important than ever, and this can only happen effectively when critical data sources are viewed through one common view of the network to create a single source of truth.

Across the utility industry there are many examples of legacy and disparate systems, inaccurate data and manual processes that lead to inefficiencies in planning and operations.

Many in the telecom industry have recognized that “swivel chair management” of diverse applications does not serve the needs of the business and have taken steps to integrate all critical data sources and internal systems into a single geospatial view that supports the entire network lifecycle. This dramatically improves situational awareness, which in turn accelerates disaster assessment and response, as well as proactive planning and operational decision-making.

Forward-thinking companies such as Chubu Electric Power Grid are being proactive in disaster management using this approach. A shared disaster assessment and response dashboard that enables the team to quickly visualize what is happening and make on-the-spot decisions. Chubu’s field and office teams have full access to an accurate view of their network assets and equipment to plan and prioritize response activities. Dispatch information tells crews where they need to be, and live traffic data and hazard maps help them plan their routes. Their digital mobile tools also allow field crews to capture and feedback network status and repairs, feeding real-time network data back to decision makers.

Without the integration of all data, and everyone having a common and up to date view, costly mistakes can happen during emergencies, and decisions made for ongoing planning could be based on inaccurate network information.

Focus on constant technology innovation to ensure consistent ROI

Electric utility operators have been building IT infrastructure for decades and have collected many applications during their journeys. Each application has been brought into the business to address a new challenge, often creating silos of information that can’t be easily shared, compared or leveraged.

To address this, network operators in the telecom industry have developed a culture of constant innovation, regularly evaluating their strategic technology, to ensure that they are best placed to meet customer needs and remain competitive while also gaining the best return on investment at any given point in time.

Electric utility operators should look to develop this same culture of innovation if they hope to keep pace with rapidly changing technology and market conditions.

Build innovation into your cultural DNA

Ultimately, the biggest differences between telecom and electric utility operators have been the market drivers and resulting culture that has developed around these factors. Now, many of these drivers can be found in both industries, and utility operators can benefit from taking a page from the telecom operator’s book.

The competitive culture and strategy of constant innovation that is so pervasive in the telecom industry has been less common in the utility industry to date, but it’s becoming more important for the sector to take on this mindset.

Market competition, government mandates, and changing consumer needs are now the drivers and the industry must develop a new operational culture. Operators who understand this and create a culture of innovation will not only survive but thrive in the years to come.

Adrian McNulty's picture
Thank Adrian for the Post!
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