With emerging technologies in the energy industry, utilities face increasing pressure to innovate and keep up with their customers’ expectations. Even utilities that haven’t traditionally been innovative are taking multipronged approaches to keep consumers happy now—and to keep them happy (and connected) into the future.
Utilities have focused on reliability in the past. The challenge is to keep improving upon reliability (improve efficiency, raise profits and enhanced customer service) while seeking out and innovating for the future of the business through new technologies, new products, new business models and new revenue streams.
Despite uncertainties brought about the current administration’s approach to efficiency, such as the decision to pull out of the Paris Climate Agreement, utilities have continued to invest in energy efficiency and other distributed energy resources. In the power and utilities sector, energy-efficiency program spending has tripled from $2.2 billion to $6.3 billion since 2017.
New technologies will transform how utilities deliver energy, and how consumers receive it. But utilities have to take risks in developing new business models and improving customer engagement. Innovation centers are another example of the inherent risk/reward utilities face. In these centers, utilities cultivate their own emerging technologies alone or with other groups.
One other model of innovation is through state energy initiatives. New York’s Reforming the Energy Vision (REV) is a well-known example. REV opens the door to new, outside-the-box ideas with four annual Innovation Sprints—open brainstorming events that focus on big efficiency challenges. This year’s topics are clean heating and cooling, electrifying transportation, innovative energy efficiency and energy storage.
The goal of these sprints, and other REV initiatives? To develop new business models, products, services and energy solutions that create value for New York energy consumers.
Overcoming challenges in innovation
Though utilities recognize the need to innovate, they’re not always well prepared to do so. The technology giant Oracle has developed a Utility Innovation Blueprint to help with that. It outlines the following series of steps utilities must take to navigate the transformation of the grid.
Lay a foundation with processes:
Accelerate with technology:
Instigate a cultural shift:
While change and innovation might be a painful process for utilities, the other option—being left behind—is unacceptable. As utilities work to modernize the grid, they will succeed and fail and learn their experiences. As customers get more energy choices and have more control over their usage patterns, they become the focus of the innovations, and they will be loyal to the utility companies that put them first.