Innovation Through Technology: A Hallmark of the Utility of the Future

Utilities find themselves caught in a whirlwind of change brought about by dynamic shifts in markets, regulation, legislation, consumer values and technologies.

One way that utilities can take charge of their future is through technological innovation. While not a panacea for all these challenges, emerging distributed technologies such as flexible demand, distributed generation, energy storage, advanced power electronics and control devices offer new ways to produce and consume electricity and deliver value to customers. These new technologies get even more attractive as information and communications technologies become more affordable and pervasive and as power systems digitize.

Market imperatives mean utilities must transform their businesses sooner than later. As the Rocky Mountain Institute observes in its newly released report, Reimagining the Utility: “Electric utilities must modernize to serve new economic and policy objectives, including managing an increasingly distributed and decarbonized power system.” But forward-thinking utilities are embracing these changes as opportunities, not threats.

Transforming operations through partnerships

Utilities may not have all the necessary skill-sets and know-how to research, pilot and deploy new approaches and ideas on their own. Instead, some utilities are jumpstarting technological innovation through strategic partnerships with academic institutions and technology providers and by sharing ideas through cross-industry dialog.

AutoGrid is partnering with some of the world’s largest energy companies, helping them transform their operations into 21st century utilities. We’re working with one of the top energy suppliers in Europe, for example, using big data and artificial intelligence (AI) to digitize their grid, improve their forecasting capabilities and optimize their resources. We’re working with a number of other energy companies globally to use predictive analytics to bolster grid reliability and resilience, make the grid smarter and enable greater penetration of intermittent renewable energy.

Partnering for profit in Asia

A recent article in the South China Morning Post details how an innovative Asian utility is forming partnerships with universities and making strategic investments in technology startups.

CLP Holdings, one of the 13 largest electric utilities in the world, has found a novel approach to improving efficiency, engaging with customers and rejuvenating its workforce. The 117-year-old Hong Kong-based utility is going beyond the confines of its business units to bring in fresh ideas and talent.

The company has invested more than US$10 million in startups, the utility’s chief executive, Richard Lancaster, told the Morning Post.

“Our strength is not in picking which innovations and ideas will work, but rather on rolling them out in the electricity industry,” he said.

While it looks to outside groups for fresh ideas, CLP is also building its bench strength. The company has formed a dedicated innovation team to bring in new talent in such areas as data analytics. And it is collaborating with universities to recruit and train a new generation of energy engineers and managers through its CLP Power Academy.

Four innovation strategies

In our work, we have identified four strategies that utilities of the future can focus on today:

1. Bridging load-management gaps between supply and demand. While investing in new resources, utilities are also looking for ways to meet demand through better utilization of the existing grid and generating resources. For example, utilities are investing or partnering with customers and third-party distributed energy resource (DER) providers in battery energy storage, demand response capabilities and other DERs to avoid or defer capital expenditures on transmission and distribution upgrades and natural gas peaking plants (non-wires alternatives) as well as to improve grid reliability.
2. Improving operations to increase cost efficiencies. Utilities are deploying flexibility management strategies to improve asset utilization and co-optimize DERs in collaboration with customers.
3. Enhancing customer satisfaction. Data-driven, automated demand-response programs position the utility as a partner in lowering demand and energy charges while enhancing system reliability. DR programs demonstrate to customers how utilities can add value through deeper engagement.
4. Deploying smart technology applications. Using AI, machine learning and data science–enabled applications, utilities are managing the mountains of data collected from smart sensors, meters and switches and putting it to maximum use daily to manage the proliferation of DERS, lower costs, improve efficiency, enhance reliability and accelerate decarbonization.

Accelerating the transition

Today’s utilities face challenges unlike any since the initial build-out of the electrical grid. But new technologies like AI and applications similar to flexibility management can help utilities realize the promise of a digitized, decentralized and decarbonized grid. By partnering with academic, technology and industry leaders, utilities can accelerate their transition into modernized utilities of the future.