By Colin Beaney, IFS Industry Director, Energy and Utilities
At a recent ARC Industry Forum in Europe the evidence was all around us, from tram doors in Oslo to the CERN Large Hadron Collider in Switzerland to Healthcare clinics in the U.S.
Everywhere vendors described how sophisticated sensors and software was collecting data and using it to predict, maintain and diagnose complex systems.
The Internet of Things (IoT) is here. Predictive analytics and maintenance in particular are becoming the rule, not the exception, in many industries.
So, what do companies in the energy and utilities sectors need to do to seize this opportunity?
The answer is not to focus on the technology, but to start at the top. Ask what your stakeholders are looking for, starting with your customers. Then let these questions dictate your strategy.
The new technology enables you to mine huge volumes of data. Tying this data to your higher business goals is crucial to growing your competitive edge.
Diversify: green portfolios, agile operations
Being able to offer customers a range of energy solutions is key. Tying yourself into developing single, high-investment energy sources with long lead times is high-risk with today’s rapid technology change.
With autonomous energy storage solutions like Tesla Powerwall emerging, predicting what the dominant power source will be even in the next five years is tough. There may well not be a single dominant power source. So diversification is crucial.
Diversification in China
One example is the China Three Gorges Power Corporation (CTG), which is well known for its huge hydroelectric projects. Its Three Gorges Hydropower dam, the largest in the world, is an IFS customer. The company began investing in wind power in 2007.
Now it is one of the largest wind power suppliers in the world, with 31 wind projects operating in China and 33 under development.
CTG recently announced a joint venture to build the UK’s largest wind farm, off Scotland. CTG began moving into solar in 2011, with 37 solar projects up and running in China and 18 under construction or development.
From brown coal to biomass in Poland
Energy company PGNIG in Poland recently converted one of its power station boilers from coal-fuelled to biomass. A common misconception is that companies like PGNIG and energy markets in Poland and China focus on “dirty, brown fuel”, but the reality is far more complex – and interesting.
As climate change targets are agreed and emission levels get stricter most energy providers now have strategic teams exploring the transition from single, high-emission power sources towards greener, renewable, more diverse portfolios.
The role companies like IFS can play, with its extensive experience of large-scale strategic infrastructure projects, is vital. Many of our customers who started off using IFS software for maintenance have gone on to use IFS for project management of this new infrastructure investment.
Deliver service – and results
The battle for customer loyalty is getting fiercer too as customer choice in both power and payment programs increases. Energy and utilities companies need to keep their customers in the forefront, and think continuously as service providers.
Any and every interaction with a customer needs to be excellent and satisfying. Customer-facing field workers need to be tech-enabled brand ambassadors.
After all, it’s never been easier for customers to switch energy providers.
Norway sets the bar high for service
Norway’s largest energy provider, Hafslund, has made smart billing and services a cornerstone of its business, providing service-centred, flexible energy solutions to private consumers and businesses. For customers it means competitively priced energy in more flexible subscription packages.
Microgrids put consumers at the centre
Customer involvement is key in the growing popularity of Microgrids too. Traditionally energy grids pushed energy out to consumers. With Microgrids consumers can feed energy back in, and get paid for doing it.
Microgrids run on high levels of customer participation and interoperability, and are cost-effective and disruption-free – one more sign that customers are becoming more aware of the whole energy supply chain.
The days when large, monopolistic energy providers could expect customers to accept monthly price hikes with no complaint are over.
Deliver and keep delivering
And it isn’t only individual customers. Traditionally in periods of high investment, energy providers have received enormous funding from government. Today’s large investors are more likely to be private or public/private bodies, and way more business-savvy.
They expect concrete results from their investment, and will look globally for the best-managed projects that are sure to deliver results – on price and on schedule.
In a smarter, more connected world good management and reliable return on investment are key to growth. The world is demanding more energy – but it also now knows far more about how it is produced, and what it really costs.
About the Author
Colin Beaney is the Global Industry Director for energy and utilities at enterprise applications company IFS, where he has worked for 15 years. Mr Beaney is a key member of the IFS product directions board and plays an instrumental role in the company’s product strategy. Prior to this, he worked as a management consultant specialising in continuous improvement techniques. For more information, visit www.ifsworld.com/au.
