Electric utility operators are facing the challenge of managing the evolving state of their grid. The demand for electricity is rising with the popularity of electric vehicles and a global shift to remote and hybrid working lifestyles. Consequently, demand and usage patterns are changing and becoming more difficult to predict and manage. To add to the challenge, decarbonization has become a priority, increasing the complexity of the grid with renewable sources and distributed energy generation.
It is clear that the electric utility industry is undergoing a massive transformation. While operators can see that the traditional grid architecture needs changing, many are still assessing their future strategy. As the transformation process gathers pace, consumers are seeing adverse effects caused by less predictable demand and generation, such as blackouts in the US and possible ‘power rationing’ trials in the UK. Without speedy and decisive action, operators run the risk of endangering consumers, damaging their reputation, and being overtaken by emerging competitors.
One area that is causing particular pain in this process is the inability of legacy GIS software to cope with new grid architectures and the distributed use of technology by both office and field teams. However, lessons can be learned from other industries that have experienced similar evolutions. For example, the telecom industry has undergone huge changes in the last decade and is arguably further along in the digital transformation journey. Telecom companies have moved from cable and copper to fibre – an evolution that inspired some operators to reinvent themselves, proactively managing demand and fighting off competition.
This leaves two questions: why is the electric utility industry slower to embrace change and what can they learn from the telecom industry?
One influential factor that is at the heart of the difference between the two industries is the telecom industry’s attitude to change. Fiber and telecom companies operate in a highly competitive market, forcing them to continually innovate by reviewing their technology to ensure they aren’t overtaken and left behind. These market conditions have forced them to transform quickly.
So, what does this innovation entail, and what can electric utility operators learn from the telecom industry? We have outlined some of the main lessons below.
Model scenarios to prepare for all possible outcomes
Over the years, the telecom industry has gone through multiple major shifts. Operators have moved from copper to coaxial infrastructure, and are now moving from coaxial to fibre. Network technology has changed and operators have responded.
These changes seen by telecom network operators are similar to the circumstances the electric utility industry currently finds itself facing. The rising popularity of electric vehicles and the increased electricity usage that comes with it, combined with a strong focus on decarbonization demands grid modernization.
Innovative telecom organizations have adapted and evolved by managing their parallel transformation challenges, developing an accurate network digital twin that helps accelerate network planning and design, and responding to new customer service requirements.
Electric utility organizations can overcome their challenges using a similar approach. Deploying the latest geospatial technology to accurately model their grid enables them to create an agile framework that can anticipate and respond to current and future changes.
As a first step in this process, innovative telecom operators have abandoned the ineffective, centralized legacy GIS orthodoxy, instead using modern geospatial solutions that can be shared by all parties across the organization, providing much greater adaptability and responsiveness. Electric utility operators can do the same, constantly evaluating whether their technology meets current business and grid needs and rethinking their strategy to remain competitive.
Telecom operators are forced to constantly innovate due to their unique market variables. While electric utility organizations don’t operate under the same market conditions, they can certainly benefit from adopting the same culture of innovation. The utility space is becoming increasingly competitive, with some larger tech organizations creating their own grids to serve premium customers and electrical operators could lose market share if they don’t reinvent their business.
Integrate all critical data sources for better decision making
The electric utility sector is facing a second challenge, the increased frequency of natural disasters and extreme weather events – a trend that is set to continue. The UN stated in their Disaster Risk Reduction Report that “the number of disasters per year globally may increase from 400 in 2015 to 560 per year by 2030.” This means that real-time grid situational awareness is extremely important, which can only happen effectively when critical data sources are monitored through a common view of the grid to create a single source of truth.
Some operators are still making important decisions using a range of disconnected applications, some of which overlap or provide contradictory information. Not only is this extremely inefficient when trying to support long term planning and ongoing maintenance, but more importantly, this drastically increases the risk profile and delay’s response time in a disaster scenario.
Telecom operators have realized that “swivel chair management” of siloed applications hinders businesses and have moved to integrate all critical data sources and internal systems into a single view that supports the entire network lifecycle. Doing so can improve reactive response, as well as proactive planning and operational decision-making.
We can see this in action at Chubu Electric Power Grid, one of Japan’s largest electricity providers. Chubu has a very proactive disaster management strategy, using an IQGeo shared dashboard that draws on all critical data sources from across the business. Doing so enables Chubu to visualize what is happening and make accurate and timely decisions when their typhoon season hits. Their office and field teams have total access to an accurate view of the network, enabling them to visualize assets and equipment and then plan response activities. Dispatch information tells field teams where they should be, and live traffic data and hazard maps helps them plan the safest and most efficient routes.
When all critical data sources are integrated into a single geospatial view of their grid, which all key stakeholders can access, costly mistakes are avoided during emergencies and accurate decisions can be made for ongoing planning.
Continually refresh technology to ensure consistent ROI
Like many industries, electric utility operators have brought in new technology to address changing requirements. Unfortunately, all too often these new pieces of software have created silos of information that can’t be easily shared or fully leveraged. The result is a substantial amount of IT debt that actually compromises the ability to efficiently manage the lifecycle of the grid.
The telecom industry has faced the same technology dynamic. However, through their culture of constant innovation, many within the industry are regularly evaluating their technology, not only to ensure that they optimally meet business needs and remain competitive, but also to maximize ROI and cut technical debt.
Electric utility operators can develop this same culture, ensuring that new infrastructure meets challenges and provides the best ROI. This will enable them to keep pace with rapidly changing grid, technology, and market conditions
Cultivate a culture of innovation
The key difference between telecom and electric utility operators has been the markets they operate in and the cultures these markets have bred. However, at present, market conditions are becoming more aligned and electric utility operators could benefit from lessons learned by telecom industry colleagues.
The competitive culture that has been ever-present in the telecom industry, and the resulting culture of constant innovation, represents a model for the utility industry to emulate.
Market competition, government mandates and evolving consumer needs are driving the industry, and operators will benefit from a new business culture. Electric utility operators who understand this and create a culture of innovation will thrive in the years to come.