Focus: The State of the Digital Transformation – North America

Futuristic technology interface
Focus: The State of the Digital Transformation – North America

The North American power sector is currently undergoing a digital transformation (DX) that will continue to play out for several years. This transformation is enhancing the way that energy is produced, delivered, and consumed. The continent has a high GCI (Global Connectivity Index) performance and strong potential for economic digitization. However, transformation is a journey […]

The North American power sector is currently undergoing a digital transformation (DX) that will continue to play out for several years. This transformation is enhancing the way that energy is produced, delivered, and consumed.

The continent has a high GCI (Global Connectivity Index) performance and strong potential for economic digitization. However, transformation is a journey and industry research indicates that, currently, just five percent of power executives are ‘very satisfied’ with DX progress to date and almost half are still using the phone, fax, and email as a business staple.

A continuous process to adapt and drive disruption

IDC’s Energy Insights bureau says that, the digital transformation can be characterized as a continuous process by which enterprises adapt to (or drive) disruptive changes amongst their customers and within their markets. This means leveraging digital competencies to innovate new business models, products, and services. Ideally, all these should blend both the digital and physical experiences (related to the business and customers) while improving operational efficiencies and organizational performance.

In terms of disruption for the utilities industry, decarbonisation is a work-towards in terms of sustainability. While this is prevalent for European markets (target: 20% renewable by 2020) it also applies to some suppliers in North America. Ericsson identifies this scenario as a driver for the introduction of distributed, intermittent and renewable energy generation.

The electricity market is also being impacted, by aging grids and workforce assets, necessitating the management of assets more efficiently via remote monitoring, management, and data analysis tools. This puts yet more focus on system energy efficiency, consumer involvement, peak demand reduction, and the electrification of transport systems (i.e. electric cars).

Asset digitization

Asset digitalization enables the collection of an immense amount of data via sensors. This transformation is taking place in the areas of Distributed Energy Resource Management Systems (DERMS) and Asset Performance Management (APM).

IDC’s FutureScape: Worldwide Utilities 2017 Predictions report states that the digitalization of assets (including power plants, electricity grids, gas and water pipelines) is an increasing priority for the utilities and independent power producers (IPPs) that own and operate generating assets. Sensors collect data for analysis, monitor an asset’s performance to decrease maintenance cost and downtime, and increase the reliability and availability of a generating asset (or fleet of assets). Through digital technology and cloud-enabled computing, utilities can manage an asset’s maintenance cycle while performing predictive analytics to avoid forced outages and identify the root causes of underperforming assets.

Distributed Energy Resources (DERs) are continuing to grow at a rapid pace, driving utilities to invest in distributed energy resource management systems. DERMS comprise hardware and software applications that provide system data, insight, and actions that can help integrate, manage, and control flexible and intermittent DERs and demand. The analysis and actionable intelligence can be applied in efforts to keep the transmission and distribution system in sync with an efficient and reliable supply-and-demand balance that best optimizes both DERs and traditional centralized generation.

Competitive DX opportunities

There are three core areas that companies in the North American power sector will need to leverage in order to remain competitive. For Investor Owned Utilities (IOU) these include line monitoring, power quality and transformer load management, security, asset management, net metering capabilities, and DER integration and forecasting. For the Independent Power Producers (IPP) it’d be prudent to look at predictive and strategic asset maintenance; balancing the fuel and power plant technology mix; energy trading and risk management; emissions compliance; new builds and decommissioning decisions. In Public Power, the considerations include: energy efficiency and demand side management; advanced battery storage; social media and customized mobile applications; smart thermostats and appliances.

Continuing the DX journey

When taking on a digital transformation, it is recommended that power organisations focus on “pain points” of the business and its customers, the areas that can mitigate risk in the long-run, as well as those that have a clear and attainable ROI. “Once initial steps have been taken into the world of DX, more complex and concurrent projects can be taken into consideration,” says IDC’s lead analyst, John Villali.

ETRM (Energy Trading and Risk Management), NMS (Network Management Systems) and asset management are areas that utility companies identify as forming the core of DX, supporting goals such as economic efficiency, reliability, and customer service. Cyber security and Meter Data Management (MDM) are also important as they are still in early rollout stages.

As to the sentiment now, other relevant industry data – mainly addressing Europe and North America – finds that only five percent of the power executives surveyed are ‘very satisfied’ with the DX progress to date, and a third (33%) say that they were ‘dissatisfied’ with the progress thus far. While 75% view the digital transformation in the supply chain as ‘important or very important’, some 48% are still using traditional methods such as the telephone, faxing, and emailing to interact with supply chain partners today.

— By Rachael Corry, Energy Writer

0 Comments

Leave a Comment

Please Post Your Comments & Reviews

Leave a Reply