Senior decision-makers come together to connect around strategies and business trends affecting utilities.

Post

Innovation Branches Out for the Roaring Twenties

image credit: © Welcomeinside | Dreamstime.com
Josh Gould's picture
Director of Innovation Duquesne Light

Director of Innovation @ Duquesne Light where I launched and now lead the company's Innovation Center. Prior to this, I launched an innovation group at Con Edison in New York, and prior to that I...

  • Member since 2021
  • 9 items added with 1,912 views
  • Jan 29, 2021 5:15 pm GMT
  • 939 views

This item is part of the Special Issue - 2021-01 - State of the Industry, click here for more

The new decade dawned with a pandemic, severe global recession, and social unrest continuing into 2021.  Despite this grim backdrop, 2021 will mark the beginning of an unprecedented era of innovation in the electric utility industry.  This year utilities will increasingly recognize the value of – and need for – innovation, and “branch out” their innovation investments as a result. Utilities will look outside their own four walls to partner with the best innovators and, in the process, form unexpected and productive partnerships.

Three, related forces will accelerate to incent this branching out: Technology change, utility needs, and the customer.  Let’s briefly look at each of them.

Your access to Member Features is limited.

Technology Change

Three forces driving technology change in and around our industry will only accelerate this year: Digitization, decarbonization, and decentralization.  The electric utility industry is no exception to legendary venture capitalist Marc Andreessen phrase about “software eating the world”.  The most obvious digitization has come as customer interactions and engagement have moved from conventional (brick and mortar, phone calls) to digital (online, mobile).  But this year will see digital push into less obvious areas like HR, credit and collections, workforce management, capital planning and budgeting processes, and even to building a digital “layer” on top of infrastructure itself.

Decarbonization will accelerate this year with policy “tailwinds”, massive continued investment from tech giants like Amazon, Microsoft, and Google, and the capital available to clean transportation startups who are now public, like Proterra.

The decentralized “edges” of the grid are leading the charge to this cleaner, more digital future.  More intelligent infrastructure – from bi-directional charging to smart inverters – has enabled the edges to interact and even transact.  As electric vehicle and DER penetration only increases and is regularly paired with enabling “smart” infrastructure, de-centralization should only accelerate and we will even see the early beginnings of multi-party transactions enabled by decentralized financial infrastructure (blockchain).  

Utility Needs

Meanwhile, the utility’s own needs for innovation are only growing.  Perhaps the most fundamental challenge is that of aging infrastructure.  The American Society of Civil Engineers gave US energy infrastructure a “D+” rating in 2017.  Meanwhile, the increased frequency and severity of extreme weather events has only increased the demands on that aged infrastructure.  Adding to the challenges with aging, stressed infrastructure is an internal skill gap around the digital capabilities necessary to operate these core activities in a decentralized fashion. 

Customers

The most important force of the three, however, is the utility customer.  Amazon’s seamless, “one button” digital experience has conditioned customers to expect products and services to be available, affordable, and convenient.  Customers now increasingly look to their utility with similar expectations for ease of interaction, choice, and control over their energy usage.  The stakes for meeting this expectations are growing ever higher as well.  More external competitors are entering the utility value chain, typically close to the customer, in retail and distribution services like DER and smart home integration.  Utilities that move quickly and effectively will provide customers the products, services, experiences, and partnerships they deserve. 

In 2021 expect to see much more of these partnerships that harness the power of technology changes, meet customer expectations, while also addressing internal utility needs.  These partnerships will branch out from the obvious, low-hanging fruit (e.g., amongst existing vendors and utilities) to include greater collaboration between utilities and big corporates, fleet providers, and key cogs of the innovation “ecosystem” like universities, labs, government, venture capitalists, and incubators.  Many utilities, like us here at Duquesne Light, have established formal innovation groups to lead the collaboration and coordination of those partnerships.  We are looking forward to sharing more about the ways we’re “branching out” to local innovation ecosystem to help our customers in 2021, and expect similar announcements from other utilities this year.

Josh Gould's picture
Thank Josh for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member
Discussions
Spell checking: Press the CTRL or COMMAND key then click on the underlined misspelled word.
Matt Chester's picture
Matt Chester on Feb 3, 2021

Perhaps the most fundamental challenge is that of aging infrastructure.  The American Society of Civil Engineers gave US energy infrastructure a “D+” rating in 2017.

This has been a pretty prevalent story for at least the last decade+. I'm wondering what you think is going to be the driver to change it to a story of resolving that finally-- is it the increased frequency of issues you cite, the more available and affordable tech, or new leadership finally prioritizing action as they should have before?

Josh Gould's picture
Josh Gould on Feb 4, 2021

Not to be glib, but the answer is YES!  The scale of the problem is such that we need both tech innovation that enables newer (and cheaper) usage, policy leadership and funding, and probably a few examples that remind us of how critical that infrastructure is.  All underpinned by both a willingness and desire to address it.  It's a solvable problem, and it's up to all of us to decide how much we want to solve it

William Thai's picture
William Thai on Feb 5, 2021

Three forces driving technology change in and around our industry will only accelerate this year: Digitization, decarbonization, and decentralization.

This is definitely a driver in the industry globally.  Although it can be challenging at times, a holistic approach to innovation and program prioritization is necessary to optimize a utility's spend, while maximizing customer benefits.  With acceleration in technology development and maturity, along with increased customer interest and adoption, utilities can unlock and realize value at a faster pace.  For example, there has been a big push in smart cities and fleet electrification (at both the electric vehicle [EV] and autonomous vehicle [AV] levels).  In my local community, electric autonomous buses are already in place and there are plans to construct and pilot electric air taxis.

...digital push into less obvious areas like HR, credit and collections, workforce management, capital planning and budgeting processes, and even to building a digital “layer” on top of infrastructure itself.

Across the industry, many utilities seem to be adopting more cloud-based, self-service technologies for this purpose.  These technologies are leading to, not just, customer self-service (viewing bills and payments), but also customer, credit, system analytics and operational optimization.  A few examples include workforce management and customer programs & marketing insights.  Some of this data can lead to insight when developing new customer programs, rate & tariff development, target markets, crew dispatch, and real-time updates to crew arrival times and outage restoration times.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »