The New Generation of Utility Companies

The energy industry will see unprecedented changes over the next few years, and the utility companies who will remain competitive are those capable of breaking away from traditional business models and adapting to emerging technologies.

Running a utility company has traditionally been expensive in terms of capital, but very simple in principle. Basically, there have been three main concerns:

• Bringing more generation capacity online as power demand grows.

• Expanding the power grid to accommodate the increase in generation.

• Reducing operating expenses.

Also, given that energy is fundamental for society, governments have introduced regulatory frameworks that guarantee profits for utility companies. In short, is was a safe investment for anyone with the capital.

However, this is starting to change. There are several emerging technologies that will completely change the rules of the game, disrupting a century-old business model. Utility companies can see these trends as opportunities and evolve accordingly, or they can cling to traditional models and risk going out of business. The most relevant technologies that are currently on the rise and could disrupt how utilities operate are:

• Small-scale energy generation

• Distributed energy storage

• Electric vehicles

• The Internet of Things (IoT) and smart devices

The traditional business model worked for so long because most of the value was concentrated in energy generation and distribution. However, this is no longer the case as new value streams emerge, most of them located outside the scope of operation of utility companies.

Utilities Must Open Up and Innovate

With all the recent technological innovation, energy consumers are now becoming partially or fully independent from utility companies – they can generate and store their own energy, or they can manage their demand according to the electric rate structure so that their power bill is as low as possible. Any utility companies who decide to ignore this do so at their own risk!

However, this also creates opportunities for utilities to develop new revenue streams that were not previously available:

• Information Technologies: Utilities can deploy measurement and data aggregation services to offer their customers enhanced visibility of their energy consumption. If there are demand-side management measures in place, the utility can even offer the automation service. With the adoption of variable renewable sources such as wind and solar power, utilities now have greater need for energy storage – what better way to develop the capacity that to offer incentives for their customers, avoiding huge capital expenditures!

• Technology Providers: Not all customers who deploy small-scale renewable energy purchase the system; a considerable portion leases them from third parties. Electric vehicles are already following suit, and the same trend could occur with smart appliances and energy storage. Utilities can take advantage of the fact of the existing business relationship with their customers to lease technology.

The Central Role of Monitoring and Control Systems

Most innovations that are disrupting the energy industry have a common denominator: they are located beyond the power meter. This means that, for a utility company to successfully deploy new products and services, a reliable monitoring and control system must be in place. Customers can be granted access to informational dashboards, or even control features to adjust they preferred settings while operation is optimized in the background.

Logic Energy offers extensive experience collaborating with utility companies in the deployment of monitoring and control systems at customer premises, with experience that includes:

• British Gas: ECOview monitoring system for renewable heating installations by Econergy, a British Gas subsidiary.

• Real Value: Demand-side management with smart heaters, a project led by Glen Dimplex and Intel, and funded by Horizon 2020.

• Scottish & Southern Energy: Monitoring system for a district heating installation by SSE.

With a decade of experience, the technical know-how of industry experts, and expertise on both hardware and software, Logic Energy can be the technology partner of choice for any utility company seeking to improve its value proposition.