Building the digitally powered utility of the future - An Australian perspective
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Building the digitally powered utility of the future An Australian perspective
Is your business fit
for a digital world?
Imagine the future
What might the energy industry look
like in the future? Will it be just a more
efficient version of today’s model or will
radical disruption force energy players to
reinvent themselves? How can they create
a digitally-powered utility to capture new
opportunities and drive productivity?
For today’s energy companies, who are facing sweeping industry
changes, standing still is not an option. Their traditional
industry model is being turned upside down. Electricity and gas
companies face a range of new and complex demands forcing
a need to rethink their traditional business models.
1 | Building the digitally powered utility of the future An Australian perspective
A changing customer is disrupting the traditional energy value Growing stakeholder expectations
Influenced by digital experiences in chain. According to the Australian Energy Utilities need to meet higher demands
other industries, today’s customer is Council, Australia has the world’s highest from better informed stakeholders.
informed, connected and accustomed rate of household solar panel installation Regulatory scrutiny has increased,
to high quality, personalised and on- at 15%1 and the deployment of battery consumer pressure over rising retail
demand service. As a result, customers storage is expected to rapidly increase prices is growing, environmental
are demanding a radically new level of as technology matures and costs come demands are tougher and shareholders
experience from their energy providers. down. These technologies are not only expect better performance amid volatile
The relatively large share of household completely changing how our energy economic conditions. Energy players
and business spend for these services is generated and managed, but also need to be increasingly commercially-
is also driving customers to take a more ushering in a range of new competitors minded if they are to grow new
active role in conserving and generating and altering how customers interact sustainable revenue and fine-tune their
energy. Customers are becoming energy with energy suppliers. business performance.
producers and managers, representing
Ageing infrastructure and workforce A new competitive market
a powerful shift that will prompt
In the face of rising energy prices, today’s Energy players of the future will need to
today’s utilities to re-examine their role
utilities are being challenged to increase respond quickly, not only to disruptions
if they are to avoid becoming mere
performance and optimise capital in technology, but also from aggressive
infrastructure providers. Meanwhile,
expenditure by safely extending the life new market entrants. Industries such
consumer behaviours are changing as
of older generation, transmission and as communications, broadcasting,
the millennial generation of digital natives
distribution assets. This requires a new healthcare, transportation and hospitality
enters its prime spending years. Meeting
and more innovative approach to drive have already been turned upside down
these new expectations in a digital world
asset performance — leveraging data and by companies such as Netflix, Airbnb
will be critical if energy players are to
insights to make real-time optimisation and Uber who have taken the concept
survive and thrive.
decisions. At the same time, the impact of leveraging under-utilised capacity
A collision of technologies of technology, particularly on customer and new delivery platforms into the
A combination of new digital technologies, service and security, is disrupting the mass market. These competitors are
such as big data, mobility, the Internet skills needed in the workforce of today’s also using digital channels to quickly
of Things (IoT), smart meters and smart energy company, just as many utilities lower costs to serve and enable new
grids, are quickly transforming how workers near retirement age. In this new product offerings. The emergence of
assets and operational processes can digital world, knowledge needs to be technologies that enable peer-to-peer
be managed. In parallel, new energy strategically managed and be effectively sharing and the production and storage
technologies are enabling commercial transferred to the next generation of of distributed energy may see this type
adoption of distributed generation that digitally savvy workers. of new model rolled out even faster. New
digital capabilities and the ability to adapt
quickly will be critical to successfully
compete in this new distributed market.
1. Source: Renewable energy in Australia — how do we really compare? — Australia Energy Council, June 2016
Building the digitally powered utility of the future An Australian perspective | 2
Utilities must • Adaptive: Innovation and agility
will be critical to the success of
A cornerstone of this change will be their
ability to leverage digital technology
adapt quickly the utility of the future. Businesses
must be looking ahead to predict
which can help them to:
1. Redefine the customer relationship,
These factors have already changed the unknown disruption and seize understand customers, compete at
landscape in which energy utilities operate business opportunities. They will the right cost and provide innovative
and grow new revenue. There is limited need new commercial and innovation products and services that their
time for the steady incremental evolution skills to enable them to react nimbly, customers want.
that has defined the energy industry’s make smarter decisions and even be
regulated history. Market players will be prepared to fail fast. 2. Build a more intelligent network
under increasing pressure to adapt quickly that improves operational efficiency,
• Automated: Utilities will need to adopt reduces the need to fund additional
by adopting new digital capabilities and a
a production line approach and operate infrastructure and enables a better
more agile commercial mindset.
with simplicity, scale and speed to drive customer experience.
The utility of the future will need to be: productivity and reduce costs. They
will need to embrace new technologies 3. Engage and empower the workforce
• Customer-centric: It’s time to move
such as robotics, IoT and big data to to cultivate an entrepreneurial culture,
the focus from managing assets and
transform the way they deliver services. increase digital readiness and improve
connecting homes to truly enhancing
safety and productivity.
the energy customer experience. • Performance focused: Energy
players must align all capabilities and 4. Ensure the sustainability of our
• Hyper-connected: Utilities will need
processes around a clear business energy supply through enhanced
to build an integrated and secure
purpose and prioritise investments with environmental performance and
ecosystem that leverages digital
a laser focus on end-to-end, quantified enable an efficient and flexible
intelligence to integrate information
business outcomes. distributed energy value chain.
about its workforce, assets and
customers and enable “always on” 5. Strengthen the security and privacy
functionality. of customer, network and employee
The hyper-connected information to mitigate growing risks
• Proactive and predictive: Utilities
must take on a new proactive approach utility of the future in a digital world.
enabled by better use of digital Adopting these capabilities will require
technologies and data insights to drive today’s energy utilities to rethink and
the optimum productivity of assets, re-imagine their ‘future ways of working’.
operations and customer service.
The EY Digital Australia: State of the Nation 2015-16 research
paints a powerful picture of how digital, within just a few years, has
made an impact on almost all aspects of Australians’ daily life:
38%
nearly
6 in 10 More than a third
of Australians have engaged
of Australians prefer to
smartphone users have with companies on social
make transactions over
more than ten apps on media
the internet than by
their phone
phone or face-to-face
3 | Building the digitally powered utility of the future An Australian perspective
Digital change has started So what’s the game Utilities will need to master many of these
technologies and trends in parallel if they
Some global utilities are already changer? are to achieve real breakthroughs. This
heeding the call from customers and means developing new capabilities that
Digital integration
investing in a better digital experience. will allow them to operate and compete in
Many aspects of today’s digital life,
EY’s Digital Readiness Index sees the a digital world.
such as social media, the cloud and
power and utilities industry investing
mobility have been around for some Let’s imagine a world where successful
in capabilities and in some markets
time. However the game changer is energy companies are bold, nimble,
ranking above average in digital maturity,
the collision of these established ambitious and customer-focused. Let’s
with utility companies in the Asia-Pacific
digital technologies with a raft of newer use digital to help make this vision a
region ranking particularly high in
technologies, such as Geographic reality and build the hyper-connected
digital readiness.
Information Systems (GIS), big data, IoT, utility of the future.
While this improvement is encouraging, augmented reality, robotics and artificial
it is clear that energy players have intelligence. This is driving the ability to
more work to do in leveraging the radically rethink complex challenges in “The danger is to think that
pervasiveness and power of digital ways unimaginable in the past. a new digital world is just
technology if they are to compete and
adapt to change. An intelligent and
Changing demands on energy players about the technology. The
have created a compelling reason to
integrated approach to holistically
innovate. Utility companies are starting real challenge is to identify
transform business practices will be
critical to doing so successfully. Too many
to adopt innovations from adjacent high value areas to digitally
industries such as telecommunications,
organisations on this journey have found
aviation, oil and gas and defence to innovate and create
out the hard way that this is not about
developing a cool app or a new website.
become more connected and intelligently breakthrough experiences
manage customers, assets and services.
Rather, true digital innovation must be
They are also using digitally enabled for customers.”
embedded with a utility’s overall strategy
crowd sourcing of ideas to accelerate Stuart Hartley, Asia-Pacific and Digital
and DNA if it is to be sustainable and add
innovation. Power & Utilities Advisory Leader, EY
genuine value both to customers and to
the organisation.
Digital intelligence driven by integrated
data will be the key competitive
differentiator.
Digital is also changing Australians’ 1% of what could be
expectations of their energy providers: connected in the world
actually is…
50bn
internet connected
“things” by 2020*
including sensors,
RFID chips, etc.3
17% of consumers More half than 52% digital
disruption
say that energy companies (55%) of those surveyed would
offer the nation’s least consider accessing real-time
engaging digital experience2 energy usage information and has demolished 52% of the
conservation tips from their
Fortune 500 since 20004
energy supplier2
2. EY Digital Australia Omnibus 2015-16, EY, 2016.
3. Source: The Internet of Things: How the Next Evolution of the Internet Is Changing Everything, Cisco, April 2011.
4. Source: Research Summary: Sneak Peeks From Constellation’s Futurist Framework And 2014 Outlook On Digital Disruption, Constellation Research website,
https://www.constellationr.com/blog-news/research-summary-sneak-peeks-constellations-futurist-framework-and-2014-outlook-digital, 18 February 2014.
Building the digitally powered utility of the future An Australian perspective | 4
What will the digitally powered utility
of the future look like?
ith customers to b
em ent w ette
gag and em ployee i rm
en r nform eet
ir us tome a
tion the
the s of c rov iders could predic wh ir
n n gy p t and ils ne
e
p to dia er t e
e en res se
de cus e red to partn er with utili po cu ds,
ow t ie n d rst in
ed mp or to
e t uld
de
lo ritic vent
a fie ed ex
we
n ld w
g
o
st
a uc t
utilities’ biggest co
sc
c
ed or
ru
r c l infr
t ke e
mp c
d b ilitie
er
va
os
et rc
etwork could find
na
om
a
iti o
ts
n
ar
y
i
o
ut
ot
l
erg an n
ec
bo
e
an
ge th d
m
n a e
ul
an ir ne
ee ym tw fix f
n
d
d d ture
be
ast
th entl
w
e
or
be
mi
as s be
oul
k
ss
ld
ll ig
ram
ruc
a
v
au ass
cou
ssi
an
irt
es c
uch
lt
e
nd
ual
ons
atica
int
int
ers
utiliti
as w
ern
l
ld
y gu
for
custom
cou
e
lly increase business pe
et pl
ts f
eather related disruptio
e
i
they happen
d
utilities
ed by an exp
or improved rel
atform compan
ert
ia
y
vi
bilit
o
a
r th ente
n
a
y
an r
s
ug
fo
e
mo
de
i
m
rma
r
ffic
cu
re
st ienc
imagine if
-
om y
nce
e
d
ffe
re er
al s
ct
ity
ivel
tec y
hno
logy
5 | Building the digitally powered utility of the future An Australian perspective
Redefine the Customers have made it clear that,
while they are increasingly cost-conscious “The future will be here
customer — and better informed of the best deals —
winning their business requires far more faster than we expect.
relationship than just offering the lowest price. In fact,
energy customers are willing to pay more
Digital innovation is
to get the right services delivered in the already allowing us
Imagine if utilities could right way, with the right advice about to re-imagine how to
deepen their engagement usage, disruptions and service.
respond to these types
with customers to better Attracting and retaining these domestic
and business customers presents of challenges in many
meet their needs, lower
costs and dramatically
a more complex proposition. The other industries — and
implication for utilities is that forming
increase business a better relationship with customers we believe that it’s
performance.
and understanding their “moments that about to change the
matter” must become a core underlying
capability. That relationship needs to energy industry as well.”
The customer is fast becoming more be built on applying understanding and Jenny Young, Oceania Customer Leader, EY
energy conscious, connected and insight to generate value to the customer
demanding. The digitisation of almost so that the customer is encouraged
all facets of everyday life has redefined to engage — otherwise it is just a
expectations around how people buy, transaction.
use and control services including
energy. They expect fast, accurate And a key element of building that
and personalised service wherever relationship will be the ability to deliver a
and however they want and new high quality, interactive and agile digital
technologies enable these interactions. experience. Almost half (45%)5 of those
Those days of passively waiting for the customers we surveyed said that firms
energy bill to arrive in the letterbox that fail to offer quality digital experience
are long over. In fact, more and more run the risk of losing them as a customer.
consumers are becoming “prosumers” As more and more digitally savvy
— becoming an integrated participant competitors enter the energy market,
in the market — by generating their this is a clarion call to utilities.
own energy to save money and taking
control of their energy management.
“There’s a general theme about the ‘prosumer’
— customers who are now absolutely in control of
their customer experience and have the channels
to be able to tell these larger corporations that they
don’t like what they’re doing, they don’t like their 45% of customers said
that firms that fail to offer a
customer service, they don’t like their values. quality digital experience run
And that’s very powerful.” the risk of losing them5
Penny Gray, Group Manager — Product Development and Delivery, Origin Energy
5. EY Digital Australia: State of the Nation Report 2015-2016, EY, 2016.
Building the digitally powered utility of the future An Australian perspective | 6
Digital can help deliver But the real benefit in offering customers • Enable new breakthrough services
a convenient and appealing experience such as off-grid storage, solar
a better customer is its ability to help redefine the utility- generation services and new electric
experience customer relationship. Digital gives vehicle charging services.
energy providers the tools they need
• Better predict and meet the urgent
Digital will unlock a two-way flow of to interact with customers in a different
needs of “at-risk” customers.
customer insights that, if harnessed, way. This allows the relationship to
can create a virtuous circle of value for move beyond satisfaction to enhanced • Provide customer and usage insights
energy providers. Whilst it’s true that engagement that is a springboard to that can be used to sustain competitive
our digitised world has created new offering differentiated products and prices and drive down the cost to
customer service challenges, it has also services in an increasingly competitive manage assets and serve customers.
opened opportunities to improve upon market. This will be critical to ongoing
• Support peer-to-peer trading.
those moments that matter to customers, success as the industry faces less growth
such as billing, moving and migrating prospects for traditional grid-supplied While some utilities have begun building
to new services. Building this customer- electricity as energy efficiency improves elements of a better digitally-enabled
focused culture, with the help of the right and customers find it increasingly feasible customer experience, too many are
technology, will be essential if energy to adopt new ”off-grid” distributed energy yet to execute digital in a strategic and
providers are to give customers the solutions. Some areas where digital will integrated way that differentiates them
experience they expect: help transform the customer experience: from competitors.
• Seamless integration of traditional and • Support value-based pricing and
digital channels that allow a customer innovative energy aggregation “Utilities such as Enel in
to engage when and how they want. offerings. Italy, Engie in France
• Self-service opportunities that are • Seamlessly facilitate customer and Centrica in the UK
customised and low cost. service including moves, billing and
credit management. are capturing value in
• Information that is easy to access,
understand and act on. • Provide information and create competitive markets by
• Personalised and targeted product
dialogue about new personalised aggressively expanding
energy offerings.
and service offers that are relevant
new behind-the-meter
and appealing. • Enable contestable metering
services and energy solutions that help services such as home
Many of these options will also allow
utilities to gather and predict customer
customers manage their demand. energy management
behaviours that can help optimise
business costs by improving service
• Develop new behind-the-meter and connected homes.”
products and services that transform
levels, asset planning and driving the home. Matt Rennie, Global Power & Utilities
Transactions Advisory Services Leader and
operational efficiencies. Oceania Power & Utilities Leader, EY
erience
r exp driv
es
e loy
om
st
alt
cu
y
at
an
gre
d re
value for
venue
energy
d r i ve s s er co
In Australia
providers
almost half
an d lo
(44%)
n
er v
vio t s o
w
of respondents surveyed would consider
ice t
s
nn
h
ur
s
ig
i
ov in
to al ha using their utility for trade services while
s
se ati i t
o i g e
r ve n d ri ve s d n d b nearly one-third would consider buying
a
usag e home internet services from their utility6
6. EY Digital Australia Omnibus 2015-16, EY, 2016
7 | Building the digitally powered utility of the future An Australian perspective
Build a more processing software platforms can
make real-time remedial measures
intelligent network to avoid technical losses.
3. Enhance productivity. Real-time
Imagine if utilities could information about the status of assets,
field work and customer requirements
intelligently manage
can enable the accurate trade-off
their network and assets between different network spend
for improved reliability
and efficiency.
decisions and lower infrastructure
and operating costs. 67% of customers
surveyed said they would
4. Balance the grid. Digitally enabled
The increased emergence of advanced demand-side management solutions use online portals to report
digital technologies, such as smart such as reflective pricing tariffs, energy leaks or outages7
metering, smart grid solutions, network energy storage and home energy
monitoring and advanced battery management solutions can help
technology, is transforming energy
networks. The next generation of grid
balance the grid and reduce long According to the World
term infrastructure investment.
and enabling technologies can now Bank, Australia reports
facilitate the dynamic two-way flow 5. Maintain physical assets. Artificial
of energy. They can enable both energy intelligence, drones and machine electricity transmission
players and consumers to participate learning can monitor physical asset and distribution losses
in the energy market. conditions and optimise proactive
maintenance. of around 6%.8
This intelligent network and the data it
produces can help utilities optimise the 6. Support the virtual grid.
way energy is delivered. For example: Technologies such as the IoT and
blockchain will support interoperability
1. Respond to outages more quickly. of network devices and peer-to-peer Using drones to
Remote asset monitoring, telemetry,
smart sensors and predictive analytics
(P2P) trading of energy. Digital
inspect powerlines
asset monitoring can help create
can track network conditions and a comprehensive “cradle to grave” Right across the globe, utilities
facilitate an outage response in real maintenance history that better including Duke Energy, National Grid,
time. Advanced network systems manages risk and optimises asset Southern Company and Transgrid
can dynamically reroute electricity management. are testing the use of drones to
(“self-healing”), while GIS tools can inspect transmission and distribution
help better direct field workers to fix In this way, a digitally enabled network
lines for damage from storms and
the problem. helps utilities both improve operational
normal wear and tear and seeing
efficiencies and enhance the customer
2. Reduce losses. Smart meters and new opportunities for this innovative
experience.
network sensors can detect theft solution to assist with maintenance
and leakage while advanced throughout their networks.
7. EY Digital Australia Omnibus 2015-16, EY, 2016
8. Source: Electric power transmission and distribution losses (% of output), The World Bank website, http://data.worldbank.org/indicator/EG.ELC.LOSS.ZS,
accessed 6 October 2016.
Building the digitally powered utility of the future An Australian perspective | 8
Historically, utilities collected
The collision of technologies
is driving true innovation
How are utilities
embracing geospatial
analytics? What happens when
CenterPoint Energy, Inc. is a digital takes to the air?
domestic energy delivery company
A leading Australian energy
headquartered in Houston, Texas.
distributor with customers spread
The utility provides electric
over 1.7 million square kilometres
transmission and distribution, natural
needed to address the condition
gas distribution and energy services
monitoring of 150,000km of
operations across six states serving
powerlines and almost 1 million
more than 5 million customers. They
power poles. Inspection and
have embraced geospatial analytics
clearing of vegetation represented
to provide rich digital visualisation
a significant component of their
of complex data to help with real-
cost of supply. LiDAR imagery and
time decision making. In addition
new techniques for detection of
to having a highly visual overview
powerlines and classification of tree
of the network assets, CenterPoint
species where developed.
Energy has used geospatial analytics
combined with mobile data solutions Advanced analytics were used to
to assist with critical activities such extract management clearances
as storm vulnerability assessments from the vast amount of data
— helping the utility rapidly respond captured and eliminated significant
to severe weather events such as labour costs associated with manual
tornados and prioritise resources inspection and processing.
to address impacts to critical
New route optimisation techniques
infrastructure such as hospitals.11
for aerial powerline inspection, based
upon biologically-inspired meta-
heuristics, delivered inspection routes
with 20% shorter flight times.12
11. Source: CenterPoint embraces GIS, (video – runtime 1:25 minutes), Esri website, http://www.esri.com/industries/electric, accessed 7 October 2016.
12. Source: Zhengrong Li, Rodney Walker, Ross Hayward, Luis Mejias, Advances in vegetation management for power line corridor monitoring using aerial remote sensing
techniques, www.eprints.qut.edu.au/39272/1/CARPI_2010.pdf, October 2010.
Building the digitally powered utility of the future An Australian perspective | 10Engage and • Fieldworkers can be better directed
to where they are needed and access
empower the real-time information to enable faster
response to problems.
workforce via digital • Service delivery personnel can
use apps and other mobility tools to
Imagine if a field worker directly engage with end consumers
could be guided by an expert and improve both the customer and
employee experience.
in another region through
Nearly 60%
• Building a “digital twin” of the network
augmented reality technology. that is continually refreshed with data
Just as utilities tackle the challenges from LiDAR and other sources can
of an ageing workforce, they face an ensure that field crews are working of the global utility workforce
urgent need to acquire digital-savvy proactively and minimise disruptive
is aged over 40 years13
employees with the skills and capabilities “false alarms”.
needed to build a digitally enabled, • Smart wearables could ensure safer
customer-centric utility. working in high risk situations.
The battle to attract talent with the right Case study
technological and customer skills, as
A leading UK infrastructure operator
well as an entrepreneurial mindset, pits “Innovative utilities across was under increasing pressure to
utilities against almost every other global
industry, many of which are far more
Europe are embracing improve operational efficiency and
safety, realise financial savings and
advanced than they are when positioning digital to enhance grid increase the capacity available to
themselves as employers of choice.
intelligence, optimise work its customers on its network. The
Energy companies will need to drive a company determined the need to
culture of ambition, boldness and agility
processes and improve increase its enterprise-wide view
if they are to attract staff with the right efficiency across the on network and asset information
skills and then make the most of this leveraging visualisation, analytics
potential to help become a utility of the
value chain.” and mobile.
future. They will also need to be mindful Benoit Laclau, Global Power & Utilities Leader, EY
EY worked with the client to
of bringing current long-term employees
structure the major IT and business
on the journey into this future as well, In many industries, digital technology
transformation programme, setting
ensuring that their experience and is already making field work safer, more
out a clear vision and roadmap.
knowledge is respected and transferred efficient and with less environmental
A strong focus was establishing
to the next generation of workers. impact.
upfront and ongoing engagement
In the future, digital tools and insights For some utilities, gaining innovative with the workforce. Through agile
will improve the productivity and job skills quickly may be best achieved and accelerated delivery, the
satisfaction of a utility’s workforce through partnerships while others programme has delivered a detailed
and, crucially, enhance the customer may consider spinning off separate and multi-layered visualisation of the
experience. For example: “innovation hubs”. These may better give network, with decision support tools
employees the room to collaborate on realising millions of pounds in savings.
• Analytics can predict potential projects in entrepreneurial environments The company now has a mobile-
customer issues and proactive options that allow the freedom to innovate enabled workforce. Using tablet
for workforce responses. quickly, fail quickly and learn fast. computers, regularly released apps
• Real-time data and digital channels and augmented reality, engineers can
can allow quicker resolution of visualise infrastructure and diagnose
customer issues — fixed first time with faults remotely, saving time, reducing
closed loop real-time feedback. operations and maintenance costs
and improving safety.
“A company that embeds an ‘intrapreneurial’ spirit But the success of these initiatives is
is able to encourage innovation and therefore raise not due solely to the technology but
the fact that these digital solutions
productivity and efficiency. An added benefit is that were implemented with a focus on
it curbs high levels of employee turnover and will the people using them, who played a
key role in the development of these
help in the long-term with attracting new talent.” apps and tools.
Nancy Altobello, EY Global Vice Chair, Talent
13. Source: EnergyCentral, energybiz website, www.energybiz.com/event/webcast/aging-utility-workforce-business-impacts-and-strategies.
11 | Building the digitally powered utility of the future An Australian perspectiveRethinking ways to Used in the right way, digital can help
make energy efficiency an easy option
• Smart cities can enable improved
monitoring of air conditions, traffic
sustain our energy for consumers while also helping change
processes and operations to reduce their
flow and energy usage. Advanced
analytics can enable real-time
supply environmental impact. For example:
• Smart appliances and meters can help
assessment of trade-offs for action
with respect to cost, risk, performance
and environmental impact.
Imagine if customers customers manage energy usage and
improve energy efficiency.
could be empowered
• Advanced grid technology and
and motivated to work in software can accelerate adoption of Could your freezer free
partnership with utilities to renewable energy, including distributed
up the grid?
generation.
reduce carbon emissions? In the UK, National Grid is exploring
• New business models around
As utilities face increasing pressure to how an “internet of energy” could
ownership and charging are
reduce emissions, digital technology see household appliances like fridges
lowering the barriers to electric
can help drive positive changes to energy vehicle ownership. and dishwashers balance the grid.
supply practices while encouraging In the future, imagine if sensors
• Better use of technology can reduce could turn on a dishwasher when
customers to do the same. Research
travel for field workers, improve wind power is plentiful or turn off
shows that customers are keen to be
their interactions with customers a freezer for a few minutes to help
more energy efficient – 57% of those we
and limit the impact of field work
surveyed were considering installing solar ease demand at peak times. National
on the environment.
panels on their home14 – but they don’t Grid believes that this technology
want it to be expensive or difficult. • Advanced customer engagement can could reduce electricity grid
lead to incentivising and gamifying fluctuations by 30-50%.16
good environmental practices.
“Tomorrow’s utility customer will be
better informed and better engaged,
active as part of the energy ecosystem
as user and generator. As such we
More than half
of those surveyed (55%) would consider
need to build those relationships today
through customer experience and
accessing real time energy usage
information and conservation tips from innovative products and marketing.”
their energy supplier15 Kim Clarke, Chief Customer Officer, EnergyAustralia
14. EY Digital Australia Omnibus 2015-16, EY, 2016.
15. EY Digital Australia Omnibus 2015-16, EY, 2016.
16. Source: Smart energy revolution ‘could help to avoid UK blackouts, BBC News website, http://www.bbc.com/news/business-37220703, 31 August 2016.
Building the digitally powered utility of the future An Australian perspective | 12Strengthen The convergence of operational
technology (OT) and information
of compromise. This allows an enhanced
capability to respond to a cyber attack in
the security technology (IT) increases the already
significant cybersecurity risks facing the
real-time.
and privacy of utilities industry. As critical infrastructure
providers, all utilities are an attractive
A hacktivist group
customer, network target for hackers and cyber-extortion. infiltrated a water
IT and OT convergence exposes control utility’s control system
and employee systems to cyber threats. Energy utilities
and changed the levels
must now recognise and manage these
information threats as a genuine and significant of chemicals being used
business risk as well as for the safety
Imagine if utilities could of citizens.
to treat water.17
become trusted custodians
Security and privacy concerns should not
of customer and employee In December 2015, be seen as a blocker to innovation but as
information whilst securing a way to enable trust as a differentiator.
hackers brought down Embedding risk management within
critical infrastructure.
Ukraine’s electricity innovation will ensure privacy and
The opportunities of advanced technology security risks are considered “by design.”
and connection of devices via IP system, resulting in
addresses bring new challenges, including outages to 225,000
the increased risk of cybersecurity
threats. The complexity and rapid customers.
pace of change of digital technology is
exposing utilities to more sophisticated
OT and process control systems can no
and frequent cyber attacks which have
longer be managed in silo, separate to
the potential to breach customer and
corporate IT and risk management.
employee privacy, incur regulatory action
or even bring down generators and grids. On the plus side, advanced digital
55%
technologies are also enabling increased
Cyber attacks are now a matter of
security capability, including advanced
“when, not if” — the ability to prevent
security monitoring and analytics. The next of customers
an attack needs to be supplemented surveyed said their biggest
generation of security operations centres
with abilities to detect and respond to concern relating to data security
are using big data algorithms to analyse
the inevitable attacks.
patterns of traffic on both corporate IT and and their utility provider was
OT networks to identify possible indicators the privacy of personal details18
“The Internet of Things offers
consumers convenience, and
provides businesses with vast
amounts of data on customer
habits. However, this also
presents a greater threat.
Security and privacy
must be a forethought not
an afterthought.”
Charlie Offer,
Oceania Power & Utilities Cyber Security Leader, EY
Watch our video
https://www.youtube.com/watch?v=4fczkoO_-VQ
17. Source: Hackers hijacking water treatment plant controls shows how easily civilians could be poisoned, International Business Times website,
http://www.ibtimes.co.uk/hackers-hijacked-chemical-controls-water-treatment-plant-utility-company-was-using-1988-server-1551266, 23 March 2016.
18. EY Digital Australia Omnibus 2015-16, EY, 2016.
13 | Building the digitally powered utility of the future An Australian perspectiveImagining a digital driven energy market in 2020
What could the future look like for those utilities that act now
to embrace the opportunities of digital?
In the future, the IoT and digital technologies will improve operations and stakeholders’ satisfaction.
They can support a truly distributed energy world and create an unprecedented multi-way flow of information, for example —
Drones provide 3D imagery on network
assets to enable engineers to remotely
diagnose the cause and point of failure
IoT sensors such as
simple accelerometers
producing large volumes A sharing economy built on a secure
of data on the condition and self-verifying blockchain platform,
of assets monetising the network as consumers
A smart meter buy and sell energy peer-to-peer
will automatically
provide consumption
Augmented reality
data in real-time
headsets provide instant
information and visuals
Artificial Intelligence
to improve operational
customer service proactively
performance
engages and responds to
A fully integrated digital consumers, driving down
solution automatically updates OpEx costs and improving
stakeholders on supply broad measure of customer
Artificial Intelligence computers interruptions in real-time satisfaction (BMoCS)
employ machine learning algorithms
to predict and identify at-risk sites
Cyber resilience built
and assets to prevent outages across
into all aspects of the IT
the network
landscape will protect
against threats to
consumers and the network
Some of the disruptive technologies will become the norm by 2020.
The leading organisations are already exploring how these could be adopted in their business.
Building the digitally powered utility of the future An Australian perspective | 14How might my future energy world change?
ger’s perspec
a tiv
an e
M
mer’s perspe
to cti
s ve
Cu
• Brings together innovative products and
services beyond energy to solve holistically
customer lifestyle and business needs.
• Proactively suggest innovative tailored
• Controls all energy needs, their car (which solutions which change experience and
they can charge anywhere), wireless lower costs.
internet, and telco services from a single
• Allows customers to manage their own
digital account.
transactions using self-service tools.
• Generates and stores own energy using
• Solves customer queries
solar panels and batteries and sells excess
proactively and communicates in a way
to other customers or the grid.
customers choose (through any channel).
• Lets utilities control some appliances such
• Predicts service disruptions ahead of time
as air conditioners to access cheaper tariffs.
and informs the customer around next best
• Controls their own home and appliances, action.
depending on complex rules. I.e. The
• Initiates transactions with no input from
customer can allow their washing machine
a physical person and routes these into
to search for the cheapest power in the next
existing service delivery channels.
24 hours and turn on when electricity is at
its lowest. • Knows intimately a customer’s history,
financial state and challenges and can
• Sells energy stored in electric vehicle when
respond in personalised ways to individual
energy prices reach a particular threshold.
needs.
• Controls their home’s lighting and
• Knows in real-time competitor behaviours
temperature using wearable sensor devices.
and can respond quickly with counter value
• Switches retailers automatically and in real- propositions, including special situations
time to find the cheapest source of energy like hardship.
and services.
• Delivers on corporate responsibility
• Is educated about energy use to improve priorities and customers’ values.
behaviours and protect the environment.
15 | Building the digitally powered utility of the future An Australian perspectiveperator’s persp
eto ec
tiv
ss
A
e
orker’s persp
d w ec
l ti
ie
ve
F
• Can see an integrated view of information
at the centre around the status of
assets, work and customer needs – to
make proactive decisions to optimise
productivity. • Uses mobile devices to get real-time
information about a particular residence’s
• Uses real-time geographic views of the
customer, their prior complaints and other
network to see all incidents currently
important data.
impacting its operation.
• Engages with the customer, or a selection
• Lets the network self-adjust and self-heal
of multiple customers, in a geographic
in response to conditions.
region with a click of a button to access
• Reviews the history of network events information about works in that area.
in real-time, to identify weak points and
• Receives real-time updates from
deploy field trucks.
a customer regarding enquiries or
• Predicts network failure in response to complaints associated with current works.
projected weather events, and prepositions
• Reviews schematic plans and photographs
limited assets as quickly as possible.
of particular assets in the field before
• Communicates with customers about commencing jobs with notes from previous
planned or unplanned network events jobs attached.
using automatic digital channels.
• Sees asset performance and maintenance
• Dynamically finds new sources of energy history, with intelligence-driven repair and
to supplement the network in times of maintenance activities identified.
high-load stress.
• Monitors physical conditions to ensure
• Actively monitors risks to both the network safer working.
and customers — proactively deploys
• Uses smart-glass enabled safety goggles to
defences to protect against threats.
view relevant information in the peripheral
• Manages a digitally connected grid that is whilst using both hands to work. The
standardised and operates at the lowest operation can be recorded for OH&S
possible cost for customers. purposes and continuous improvement.
Building the digitally powered utility of the future An Australian perspective | 16Digital innovation isn’t just about the technology
Strategic “get rights” include:
Imagine a utility of the
future that is bold, agile Frame the strategy: Digital impacts everything — becoming a digital utility may
require a complete rethink of business models. Utilities will need to determine a
and customer-centric long-term purpose, based around current strengths; develop customer-focused
goals; and then take a value-based approach to determining how digital can enable
For utilities to really make the most
these goals.
of digital, they must first accept that
doing so goes far beyond IT. Instead,
digitally-enabled changes must be Ready the base technologies: With so many technological advances and options,
part of a greater strategy that is it is critical that utilities understand what’s available and identify those that
underpinned by a commitment to map to their own business goals. They must master strategic digital capabilities
shift from a traditionally risk-averse aligned to their strategy.
mindset towards a more agile and
innovative culture. Doing so requires Mobilise digital ready people: Technology is only as powerful as the people
utilities to move through several, who use it. For utilities, shifting the organisational culture from a largely
inter-connected steps. engineering mindset to an entrepreneurial one is essential but not easy.
Utilities will need to be proficient in change management and developing new
The utility of the future will be:
talent with the right skillsets. They need to look to more digitally mature industries,
• customer centric
such as telecommunications and financial services, to extract leading practices.
• hyper-connected
• proactive and predictive
• adaptive Develop a digital innovation program: The rapid pace of change requires
utilities to keep up with digital innovation. Investing in continual innovation will
• automated
represent a shift in how utilities allocate resources — it’s time to shift towards to a
• performance focused technology and information based business.
It will be driven by a clear business
purpose. Focus on design: The success of digital within a utility will be determined by how
Unless these foundations are laid, widely it is adopted. A focus on intuitive, user-friendly and appealing design when
implementing technology will encourage take up. This design must be aligned to
any attempts to use technology to
strategic priorities and virtually integrated.
build new customer relationships or
address other industry and external
trends will be superficial and more Align to your customer: Utilities need to envision the digitally-enabled customer
likely to fail. journey and then build the infrastructure to support that. This design needs to
encapsulate outside-in thinking and focus on those “moments that matter”. This
Imagine a utility that makes strategic means listening to what customers want before making any technology changes.
and intelligent use of digital to Don’t waste time and resources developing an app no-one will use.
become more efficient, more
customer-centric and more able to
adapt to the many trends reshaping Structure for success: Companies will need to set up different processes and
the energy world. It’s a vision that is teams to deliver various digital capabilities. For example, separate innovation
clusters will need to be set up to manage customer service, grid analytics,
possible. Energy companies hold the
mobility and digital readiness and innovation. Utilities will also need to develop a
assets, network data and customer
digital framework to govern the interactions of these various clusters.
bases they need to succeed in
a digital world but they need to
quickly rethink their ways of working Build necessary security capabilities: New technology = new risks. Utilities
to successfully leverage these will be vulnerable to cyber attacks unless necessary safeguards are put in place.
inherent advantages. They can do This starts with identifying all potential sources and types of threats to a utility’s
this by making significant changes infrastructure, designing a cybersecurity strategy to address these and then
investing in the appropriate infrastructure.
to business models and rethinking
investment priorities, utilities can
seize the promise of digital to
support their transition to the utility
of the future.
17 | Building the digitally powered utility of the future An Australian perspectiveIs your business strategy ready for digital?
There’s no point beginning any digital initiatives without first understanding the
capabilities of your business now. EY’s Digital Readiness Assessment can give you
a clear vision of your starting point and a roadmap to help you reach your goals,
using digital tools.
This online, interactive, assessment and benchmarking tool supports you to
benchmark digital maturity across seven focus areas:
• Strategy, Innovation & Growth
• Customer Experience
• Supply Chain & Operations
• Technology
• Risk & Cyber Security
• Finance, Legal & Tax
• People & Organisation
Watch our video
https://youtu.be/EB_fvRH2BOw?list=PL975E56F131561576
Building the digitally powered utility of the future An Australian perspective | 18EY: Building confidence in a digital world
In a digitally disrupted world, EY provides confidence Through our professional insight and judgement,
to our clients and stakeholders through every firm grasp of technology and innovation, and
digital element of business transformation (tax, human intuition, EY helps the boardroom seize the
legal, people, regulatory, compliance, technology, upside of disruption. As EY builds confidence in the
innovation, capital investment strategy). The higher capital markets, so we will build confidence in the
quality results help grow and protect their business digital world.
and build a better working world.
EY’s core digital offerings
Enterprise Incubation and Experience
Operations Trust
strategy innovation transformation
We help our clients We establish an end We analyse We align, enhance We scan the digital
re-think their to end innovation the world of and automate risk horizon and
business strategy capability to the customer, operations and help our clients
and operating incubate new then design and supply chain to build agility to
model for a digital ideas and business implement new deliver on the respond to digital
age. models. experiences. promise of digital. risks.
19 | Building the digitally powered utility of the future An Australian perspectiveContact us
For more information, please contact:
Stuart Hartley Russell Curtin
EY Asia-Pacific and Digital EY Oceania Energy Leader
Power & Utilities Advisory Leader russell.curtin@au.ey.com
stuart.hartley@au.ey.com LinkedIn
LinkedIn
Nick Cardno
Jenny Young EY Oceania Energy Transactions Advisory
EY Oceania Customer Leader Services Leader
jenny.young@au.ey.com nick.cardno@au.ey.com
LinkedIn LinkedIn
Charlie Offer Ryan Fisk
EY Oceania Power & Utilities EY Oceania Energy Assurance Leader
Cyber Security Leader ryan.fisk@au.ey.com
charlie.offer@au.ey.com LinkedIn
LinkedIn
Paul Laxon
Matt Rennie EY Oceania Energy Tax Leader
EY Global Power & Utilities Transactions paul.laxon@au.ey.com
Advisory Services Leader and LinkedIn
Oceania Power & Utilities Leader
matthew.rennie@au.ey.com
LinkedIn
Building the digitally powered utility of the future An Australian perspective | 20EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust andconfidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. © 2016 Ernst & Young, Australia. All Rights Reserved. SCORE no. AUNZ00000674 ED NONE. S1629785 This communication provides general information which is current at the time of production. The information contained in this communication does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Ernst & Young disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. The views expressed in this article are the views of the author, not Ernst & Young. Liability limited by a scheme approved under Professional Standards Legislation. ey.com/au
You can also read
