(Blog): Humans are often reluctant to take the steps they need to improve their lives. When our tooth aches we put off the dentist, hoping the pain will subside by itself. We struggle to change our fitness or eating habits even though we know they have lifelong benefits, says Oracle‘s Mike Ballard.
This irrationality is not confined to our personal lives: there are plenty of examples in the world of business where organisations delay measures that they know will bring them benefit. In the world of utilities, this is well-illustrated by the industry’s conflicted approach toward analytics.
The value of data-driven insight is almost universally understood throughout the utilities sector. According to research from Accenture, more than 90% of energy providers say that data analytics technologies are among the most important assets in preparing for smart grids. Yet the same report found that less than two-thirds actually plan to invest in analytics.
Meanwhile, our own research recently found that barely one in six utilities feel completely prepared to manage the impending influx of smart grid data.
Smarter network management
It will take some time to reprogramme the ‘Old Brain’, so instead let us focus on the benefits and hope these can tip the scales in favour of a renewed focus on analytics.
Let’s start with the improvement that smart grid data delivers to network management. Today utilities are under extreme scrutiny from consumers and regulators alike, making grid reliability and outage response more effective and transparent. The complexity and dynamic nature of smart grids present unique economic, engineering and safety challenges. With a more interconnected network and constantly changing load dynamics, smart grids demand significantly more decisions regarding assets deployment and network topology and at a much faster pace. Furthermore, understanding the impacts of making changes on the grid require more sophisticated analytics compared to the traditional energy networks.
Data from smart meters enable utilities to gather millions of more data points across the grid to better visualise how voltage is being distributed throughout their networks and more importantly, why. This provides a rich variety of historic, real-time and even predictive data: for example, it could predict how a local transformer might fail in different scenarios, based on its type, age and network load.
Creating customer demand
While this data promises to transform the way that utilities understand and can manage their networks, it will have no lesser effect on the relationship with their customers. This relationship has been strained in recent years. Increased politicisation and rising energy prices fuelled by polarising media coverage has resulted in a groundswell of distrust of utility firms. Data analytics can even help here by improving targeting the right customers for efficiency campaigns, and can provide deeper insights for customers that will empower them to take charge of and reduce their own energy use and help restore trust in their energy provider.
The rules governing utility companies’ access to smart meter data are still being finalised in countries such as the UK. Current indications suggest energy providers will not automatically gain access to detailed customer consumption data as they will have the option to opt out of sharing this information. This is all the more reason why utilities should take the lead in driving benefits to customers and effectively communicating them.
An infrastructure revolution
The full impact of smart grids can only be imagined, but it is clear that it will represent a revolution in modern utilities infrastructure, the energy market and how customers source and manage their energy.
The effective collection and analysis of data will be absolutely central to managing this infrastructure, both in day-to-day operations and as we seek answers to the long-term strategic challenge of providing affordable, sustainable energy for all.
Data analytics is the medicine that will keep our energy infrastructure healthy during this time of great change, and beyond. It’s not a bitter pill to swallow, side effects are negligible – so maybe now is the time for utilities to take the plunge and do what they know is best for them and their customers in the long term.
The author of this blog is Mike Ballard, senior director, Utilities Strategy, Oracle EMEA