Energy
The energy sector is a complex one at the best of times, but lately it seems to be beset with an exceptional load of problems. For example, the freak snow storm in the US Northeast this fall cause long power outages that led to customer outrage and a flurry of executive departures. In this case, a major setback to the industry was the backlash of customer anger and dissatisfaction – a troubling outcome for utilities that need to provide exceptional service to retain their customers.
Technology can help the utilities improve their service levels. A utility company should use its personnel on the street most effectively and efficiently to improve customer service. Utilities should make collaboration technology a major service improvement priority, and determine which of the myriad devices now available-laptops, netbooks, smartphones, tablets, walkie-talkies-are the most effective for their street-level personnel, and how those devices can be integrated into their back-end systems to best serve their customers and the organization.
Another problem that this industry faces is the aging infrastructure. Utility companies too often work at cross purposes, or at least at independent purposes, when seeking to improve or repair their pieces of utility infrastructure – an upgraded transformer here, a new piece of pipeline there. That can cause trouble when there is a problem in one of the networks, since there are no up-to-date data or design maps to pinpoint the location of the problem. That’s where the smart grid comes in. The smart grid is an- effort at improving the intelligence-data gathering and interpretation capabilities – of a utility network. Most utilities have begun the process of installing smart meters at business and consumer sites. The next iteration of smart-grid technology involves implanting sensors at many locations along the network to track variables as closely as possible in real time.
There are many other ways that technology can help this sector. We have covered this in our article, ‘Global Transformation in Energy & Utilities through Strategic Use of Technology.’A big-picture business view as well as cutting-edge technology expertise will be necessary to help utility IT executives face the challenging future. IT solutions such as collaboration, application integration, and in particular business intelligence and data analytics hold the key to more competitive profiles and better customer service for companies in this industry.
Do you think technology can help alleviate some of the problems faced by the utilities sector? Share your thoughts with us.
Solution:
MENgineeringodern information technology reduces economies of scope (i.e., cost advantage of producing a bundle vs. a single service) in grid-operated energy systems. Before, economies of scope were important in utilities selling a bundle of services-electricity, transmission, distribution, measuring, and billing. This could be done more cheaply by one company, compared to the same services being offered by separate entities.
This is no longer the case. Computer technology has made unbundling of services possible by allowing coordination between independent commercial actors in closely interconnected systems. Coordination between competitors requires that large volumes of information be shifted around at low cost.
A trend towards smaller units in energy supply will undermine the dominant position of large and often vertically integrated energy enterprises. Increases in cogeneration with surplus energy available to the grid will in many countries call for regulatory changes that will affect the interface between grid owners and independent producers.
If the trend towards “clean and cheap” small-scale technologies continues at today’s rapid pace, this would represent a major force for radical changes to the structure of the energy sector.