Can Digital Help Grid Companies to Turn Challenges into Opportunities?
Grid companies are faced with many challenges, such as changing energy flows in their grids (for example from distributed energy resources), changing regulation, increased cyber security threats and continuously increasing pressure on operational costs. The question is not if these companies should implement smart digital grid technologies, but how, when and on what scale? Roy Ikink, Managing Director Smart Grid Services and Resources Technology Consulting at Accenture, knows where to start (too).
‘The question to be answered by grid companies is: ‘How can digitization support their business?’ We are at a point in time where technology is maturing incredibly fast and new technology is becoming available at a speed and with an impact we have never seen before. With an abundance of possibilities, it is almost impossible not to look at digitization from a technology perspective. However, companies should still take their business strategy and goals as a starting point to determine where and how (digital) technology can support them.’ ‘I am convinced that if we do this right, it’s not a question whether grid companies should digitize; it’s a question of where, how and how soon. Ultimately, grid companies will use digitization to keep distribution networks operational, sustainable and as energy-efficient as possible while maintaining their connection with their customers.There are multiple ways digital technologies can be applied to run existing business models more efficiently while enabling new business models at the same time. By the way, when the “digital grid” is mentioned, people often only think about electricity but keep in mind it applies to heat, water and gas, too.’
This Is How Digitization Could Take Grid Companies to the Next Level
‘Grid companies face industry challenges, which can be transformed into opportunities to change the business. Aside from being a necessity, it also presents many possibilities to add value to the organization and to society. For instance, digital technologies can be applied in grid companies to improve the security of supply, reduce costs and offer more efficient and user-friendly services to customers.Moreover, digitization can also support employees in grid companies to execute their work more safely and efficiently. Of course, how to utilize these opportunities is the million-dollar question. There is not one silver bullet; it’s all about creating a new mindset and developing the agility and entrepreneurship to make a difference - by always putting business goals on the first place.’
How to Ensure Renewable Energy is Available Anywhere, Anytime?
An example of emerging new business models is the following trend that’s already occurring: people generating their own energy by using solar panels or wind energy. Accenture research shows that 57% of consumers would consider investing in becoming self-sufficient and not having to buy energy from their energy provider. Especially when energy storage becomes cheaper, there is a great opportunity for consumers to become completely self-sufficient. These days, energy is generated in various ways, shapes and forms. This is where the opportunity to conceptualize new business models and share energy comes into play as well.’
‘Smart home services are another example of newly established business models. For instance, people can nowadays trade energy on a small scale - in their local area or hometown. In the (very) near future they can utilize digital technologies such as blockchain to manage these deals. However, all these self-established off-the-grid solutions aren’t necessarily 100% reliable. Sure, they will probably work well the majority of the time, but what happens after some windless days in a row, or during days when a large number of people wants to charge their vehicles? At the end of the day, I am convinced we need digitally enabled grid companies to keep the energy system running smoothly. This means grid companies need to transform as well.’
Digital Transformation Examples That Change Existing Business Models
‘In other instances, digital transformation is about redesigning existing business processes to increase value, operational efficiency and to drive growth. Some examples where the existing digital business is changed by digital enablers are:
1. Asset Management: Shifting the Mindset from Historical to Predictive
For years, asset managers have based their strategy on historical findings, maintenance curves and periodical maintenance. With the support of smart sensors (IoT, Internet of Things) and analytics (preferably combined) it becomes possible to determine exactly which assets need maintenance, and when and where. Insight-driven asset management allows for predictive maintenance resulting in fact-based choices regarding maintenance and investments. Next to the shift from historical to predictive insights, we see another change in the field of asset management: new digital technologies provide the possibility for real time asset registration and better data quality management. These are preconditions to support new and emerging business processes, like remote switching.
2. Empowering the Digital Field Worker with the Right Information
Employees in the field often have to deal with rough circumstances such as working underground, in bad weather, with complex and heavy mechanics, etc. They don’t have the same circumstances, time and sometimes experience that employees in the office have to find information in dozens of systems, applications and reports. We work with specialized teams to define the so-called “Digital Field Worker”. This workforce of the future is fully equipped to carry out their work in the best way possible. This means a more accurate, efficient and above all safer way with a user-experience that is comparable to home and personal appliances. By means of a fit-for-purpose device, the right information can be delivered to the employees at the right time. Either by making use of augmented reality on visual devices (such as Google Glass or HoloLens); other wearable tech, like smartwatches; or in most circumstances an industrial laptop or tablet might do the job, too. At the end of the day, it’s about how we can support people in the best possible way. This field force combined with a back-office where optimizing planning and scheduling is part of the daily routine will lead to large efficiency gains, increased safety and a higher employee satisfaction.
3. Analytics in the Control Room (Grid Operations)
In the control room, keywords are “reliable” and “real-time”. Operators need to ensure maintenance is carried out according to plan, and outages are resolved as soon as possible without ever interrupting the energy supply to customers. When applied the right way, support from analytics tools can give operators fortune teller-like abilities. Instead of guessing what might happen – with the weather, on the stock exchange or during a peak time – the support can predict with reasonable accuracy what will happen. These skills allow them to offer real-time forecasts and, thus, real-time solutions for potentially disruptive events in the network. Ultimately, it creates value from data by improving network capabilities, reducing costs and minimizing outages.
How to Deal with Legal Challenges?
‘It goes without saying that these are extremely interesting times for grid companies, and they are all facing the same pertinent question: ‘What role will they play and how can they add value to this new market shift?’ While it is a vital question, it should actually be phrased like this: ‘What role can or are they allowed to play?’ Regulation sometimes forbids grid companies to participate in certain commercial activities. Yet, there is a market with a swiftly increasing need for exactly this type of innovative models. Grid companies are allowed to come up with business models, as long as their goal is to keep the network unscathed. This, again, is where digital offers possibilities to establish new business models within the given regulatory framework. Exciting times!’
Valuable Acquisitions Such as the Structure Group and Mobgen
‘For Accenture, times are just as exciting. If we really want to change the way the world works and lives, we need to make sure that we are 100% on top of our game when it comes to applying technological knowledge and expertise for a specific industry. We know exactly how technology works and how companies operate, and how they can benefit one another. Accenture Smart Grid Services (ASGS) is a global team that has built a massive amount of business knowledge and technology expertise specifically around grid companies. In order to maintain our leading position, we are constantly on the lookout for collaborations to strengthen our position even more.’
‘Some examples are the joint venture with Siemens in OMNETRIC and the acquisitions of the Structure Group and Realworld that provide us with very deep skills to make the digital transformation successful. Each acquisition is beneficial in its own way, be it in a certain industry or through a specific technology. Working together with the most recent acquisition in the Netherlands, Mobgen, we can now apply the world of mobile applications and augmented reality to support the field workers at our clients.’
A 6-step Guide for Grid Companies to Integrate Grid Solutions Successfully
Keen to kick off your digital transformation? Grid companies that are ready to get ahead of the game could follow these steps:
Step 1: Define Business Priorities
Define your business priorities and identify opportunities based on business goals
Step 2: Understand Current Capabilities
Know where you stand by performing a “Digital Capability Assessment”
Step 3: Roadmap the Journey
Evaluate and define business and technology requirements
Step 4: Develop a Proof of Concept
Prototype your solution and the underlying technology
Step 5: Scale up Capabilities
Adopt a shared service model to maximize flexibility and scalability
Step 6: Execute the roadmap
Use agile methodology to allow for incremental implementation
The Million-Dollar Answer…
'Every million dollar question deserves a million dollar answer. For grid companies, the answer simply is that there is no escaping the digital transformation. It's all about integrated smart grid solutions and how to implement them effectively, efficiently and immediately.’