The verdict post-ETS is there’s potential momentum ahead for the smart energy industry

Jacob-Pereira, Jacob Pereira, IHS

Highlights of the recent Energy Thought Summit (ETS) held in Austin, Texas included the concepts of IT/OT convergence, utility operations and business models; plus newly available technologies designed to improve energy creation, delivery, consumption and conservation. Jacob Rodrigues Pereira, senior analyst, Smart Utility Infrastructure at IHS reports.

The ETS is a leading conference that brings together technology vendors, utilities, and regulators to promote smart energy practices in North America. IHS analysts who attended the conference found a uniform forward-looking mood among attendees and speakers, which was focused on critical near-term events that are most crucial to transitioning this ‘cleantech’ space from a niche enterprise, into one that is fully capitalised.

IT/OT convergence continues to create mayhem in the traditional electric utility business

It’s clear that the amount of IT expertise needed to run a modern distribution grid is rapidly increasing, bringing along with it not only new opportunities for technology vendors, but also headaches for traditional electric utilities. The broad spectrum of IT/OT convergence is essentially the driving conversation point for the smart grid industry in North America.

Electric utilities are faced with so much disruption that innovation centered on properly implementing and maximising modern IT solutions is crucial to success.  While progress is being made, utilities still need more guidance to take advantage of every available opportunity.

The concept of the ‘technology use case’ has been at the forefront of the smart grid industry since its inception. Vendors are looking for success stories, to help prove their wares to potential customers; however, at ETS utilities were asking for a different type of use case. Utilities need a better understanding of how to organise their employees and improve their business practices, to maximise the value of installing new technologies.

A new kind of use case is needed

In North America there is a growing need to clarify best practices for electric utilities, when it comes to organising personnel and updating business processes. Vendors need to view this process as an opportunity to review their successful installations and find ways to mine valuable information from their triumphs. If successful installations can be anonymised, consolidated and digested, in a manner that can then lead to clear examples for other potential clients, then the vendor is simply increasing the chance for future successful installations and case studies for their technologies.

New York and California are bringing needed momentum to the industry

Throughout the panel discussions at ETS, utility and technology speakers were looking at New York and California to give the industry a short-term push. To these speakers regulation is simply not moving fast enough to help maximise the available technology and meet the current business practices of traditional electric utilities; however, change is occurring in New York and California, which is leading players in the industry to increase their scrutiny of the progress achieved in these two bellwether states.

In New York regulators are looking to increase grid resiliency, in the wake of Hurricane Sandy; while in California regulators have conditioned the market environment to be lucrative for energy storage technologies.

In addition, just weeks after the ETS conference, Governor Jerry Brown of California has mandated a 25% water conservation cut, which could potentially lead to promoting smart utility technologies, in the wake of erratic weather patterns. The industry is looking at these two states for clues about how this new regulation will affect technology adoption, utility practices and customer service.

Final conclusion for technology vendors

Continued work to align the thought leadership of vendors and utilities is essential to near-term success in North America. Both parties are becoming fully aware of the changes that lie ahead, and both parties realise the need for regulation that accommodates these changes. While clinging to potential clarity from New York and California is productive, ETS and other industry conferences are needed to help the industry provide a focused, outward view to the public and regulators.

Change is coming in terms of how consumers purchase, receive and conserve energy and water in North America. Regulators need to continue to see a unified industry and engaged consumers, so when the expected successes in New York and California come, the momentum is not wasted.

The author is Jacob Rodrigues Pereira, senior analyst, Smart Utility Infrastructure at analyst firm IHS


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