Utility and IT models: a world in transition
For utility companies, both business and IT models are undergoing massive and irreversible changes. The similarities between these changes are striking.
With utility business models, we are experiencing changes from centralized to distributed models; the reality of renewables and the emergence of viable storage; the electrification of transport; and parallel changes in commercial, customer relationship and regulatory practices.
On the technological side, IT evolution shows strong decentralization: pervasive cloud delivery; mobile everything; the explosive growth of internet-of-things; the increased adoption of “true” artificial intelligence; and the shift to open application environments and pay-per-use delivery.
These changes to utility IT and business models are not quite chicken and egg. The heritage IT architectures used in the utility sector mirrored old centralized operating models. With considerable effort and important limitations, the new utility environment could probably have taken shape without the parallel IT transformation.
But one thing is for certain. From now on, any company seeking to take maximum business advantage of the new utility business model, will only be able to do so if they embrace the transforming IT landscape in parallel.
Think three themes: distributed, intelligent, open
If we think about what the new IT stack for utilities looks like from a functional rather than a technology perspective, it will show three clear characteristics – it will be distributed, intelligent and open.
Let’s take a very brief look at each of these.
Distributed – As new electricity networks move to higher levels of decentralization, so the control intelligence needs to be similarly distributed if the network is to be optimally supervised. This is about more than creating agile, cloud-based infrastructure models. It’s also, for example, about taking advantage of edge computing as control intelligence is required across the network, from the home or workplace, right up to a national or even continental scale. Even the fully decentralized model that blockchain and similar hyper ledger technologies may play a role in this “Distributed Energy Cloud”.
Distribution is not just applied to the electricity network infrastructure – it’s for the workforce and customers too. People expect relevant contextual access to information and services, and these expectations become more sophisticated every day. Field engineers who have grown up with gaming, for example, will soon take augmented reality as a given in service tasks.
Intelligent – The macro and micro management of complex utility networks demands constant adjustment, and this needs more powerful data-analytics. Increasingly, this will be shaped by artificial intelligence and automation, especially as even the tiniest of devices has a contribution to make in the Internet-of-Things.
The continual flow of real-time data is not just essential for intelligent network management and balancing. It also becomes an asset in its own right - particularly as utilities seek to build more extended and articulate business and client relationships.
Open – For the new utility models to deliver, openness is a prerequisite. This is true from two perspectives. At a technical level, utilities need to move away from traditional proprietary platforms if they are to achieve the interoperability demanded in new and more agile models. Electricity network management must work together with extended Internet-of-Things infrastructures.
But openness also becomes a business prerequisite. Utilities will create new business value through close working alliances with building management, with local urban authorities governing Smart cities, with automotive companies handling bigger fleets of autonomous electric vehicles, and telcos providing services to connected homes. These new opportunities can only become reality if utilities and their new partners can learn to share a common vision and language. Nobody yet has all the answers, but going back to the chicken and egg analogy, the best thing we can do together amidst this change is to share our experience and vision of the growing interdependence of utility business and IT models.
Digital Vision for Energy and Utilities
This article is part of the Atos Digital Vision for Energy and Utilities UK&I opinion paper. We explore the potential of digital transformation to help energy and utilities companies power a new era for UK businesses and homes, amid profound and rapid change across the industry.