How to Optimize Digital Transformation For Utility and Energy Companies

Utility and energy companies like other businesses are focusing on digital transformation to keep up with customer demands and growth in consumption, and to stay ahead in the competition.  These dramatic changes are forcing utilities to reimagine their business models and leverage the digital transformation by engaging customers, empowering employees, transforming products and optimizing operations. The approach is moving from reactive to proactive. Architecting the utilities of the future is essential and involves smart grid transformation, managing renewable energy and distributed generation, digital prosumer engagement, and cultural changes to meet new business challenges. 

Digitization is able to help utilities quickly adapt to this changing world by:

  • Engaging with their hyper-connected customers
  • Adopting cloud delivery models for flexibility
  • Utilizing interconnected devices offering efficient operations
  • Using advanced cyber-security controls to protect critical data

What is the road map on the journey to digitalization?

  1. Define the digital utility requirements in a systematic approach: The first step is to strategize by understanding the utility initiative like engaging with the prosumer
  2. Perform an opportunity assessment based on those strategic utility initiatives  
  3. Develop a solution roadmap for the next state generation solution
  4. Achieving value realization to deliver transformation on time, on budget and on value around a proven governance model that maximizes investments, executive engagement, value delivery, and continuous innovation

The course of action taken now will determine whether businesses succeed or fail. Forward-thinking utility businesses are exploring business models and new commercial strategies and value-added service offerings. However, embracing a culture of innovation and entrepreneurship may not come naturally to some businesses. The very nature of the traditional business model in this sector has been built upon a stable and predictable cash-flow within a relatively stable regulatory framework.

With transformation, this model is being challenged and utility businesses are being placed under pressure to become more flexible and innovative with their business models and service offerings in order to survive and succeed. 

Utility and energy industry disruption is being driven by a number of factors: 

  • The decline in energy demand as a result of high energy prices, high energy efficiency adoption, and sluggish economic performance
  • Disruptive technology is changing the game around the cost of delivering cleaner, smarter and more sustainable energy solutions e.g. Large decreases in the cost of solar units
  • Quantum leaps in battery storage capacity are expected in a couple of years
  • Digitization of consumption data is providing consumers with more information on energy use and they are responding to price signals by modifying consumption behaviors
  • Also, digitization of operational data is enabling networks to be managed and maintained smarter to drive down the cost
  • Environmental demands have become critical including the growing dependency between water and electricity costs and availability
  • Market reforms and changes to regulatory and policy frameworks are challenging long-held  assumptions on the performance
  • Finally, new pricing arrangements are being introduced and the increasing use of benchmarked data by the AI is forcing utility companies to rethink operating models and long term strategies

So what all changes can digital transformation bring about in the Utility and Energy sector? Here you go:

  • It will lead to the transformation of the energy value chain
  • Automation of distribution network maintenance system using drones and AI
  • Lower financial and time costs 
  • Lower human safety risks
  • Automatic identification of individual energy objects
  • Automatic anomaly and fault detection on distribution lines
  • Automated identification of personal intrusion in restricted areas
  • Collection of new data
  • Consolidation of internal and external data in the cloud
  • Analysis of information and anomalies in real-time
  • Notifying technicians about errors
  • Combination of internal data from wind turbines and external data from IoT sensors
  • Predictive analysis
  • Better turbine performance forecast
  • Better predictions of error rate
  • Real-time data monitoring
  • Higher operating savings and more


The key focus for utilities should be 

  • Creating integrating business-driven solutions
  • Stressing on internal reliability an ecological safety
  • Proactive maintenance
  • Energy Usage Management

Utility companies are taking very different routes to digital transformation, some are focusing more on efficiency by digitalizing processing, others are more focused on new business models and getting innovative. The difference is being seen not only in the content but also in the speed they are digitizing and so the difference between leading and lagging companies is ever increasing. Companies need to view this as a fundamental transformation across all the businesses. Artificial Intelligence (AI), Blockchain, Internet of Things (IoT) have now entered the utility space and they are adapting to utilities much faster than technologies before.


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