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Interaction | September 2013

IT Powering Energy Industry Transformation

With the rising 'green awareness' and accountability, the power industry has a strong case for automated solutions, creating the perfect market for the IT services industry. Ashiss Kumar Dash provides an insight.

The power industry across the globe is undergoing a radical transformation these days. Most of the utilities in western countries have been accustomed to advanced information databases to facilitate their day-to-day operations and management activities. In India, the concept of smart grid is gaining currency with energy security programmes and enhanced performance by the utilities.

To cite an example a once-passive customer base now interacts with providers over email and social media. And an incredibly diverse selection of sustainable energy sources means companies and their consumers are no longer captive to traditional sources.

It wasn't always this way. For the better part of a century, regional utilities provided steady streams of electricity within a highly regulated framework. Industry has witnessed, first-hand, profound changes to this 100-year-old model.

Intelligent move
The advancements in Information Technology (IT) and Operations Technology (OT) are enabling this transformation like never before. It is the intersection of IT and OT where most innovations are taking place today. The huge amount of data collected through the advanced meters, sensors and other intelligent devices in the network are not only helping utilities to optimise their resources to focus on the right areas at the right time, but are also giving them unique insights and understanding of their assets, their operations and most importantly, their consumers.

Effective information management across the enterprise is emerging as the focus area for leading utilities to achieve operational excellence and manage enterprise risks. It is the ability to correlate data and events from different parts of the network with the use of new generation of tools and processes that is helping utilities answer questions that they never asked themselves before. For example, many innovative utilities are leading the way in areas like predictive analytics to assess the health of their assets and significantly increase their reliability and safety records.

Some utilities in North America are successfully leveraging consumer analytics to understand consumer behaviour and target the right demography for rolling out programmes like demand side management and energy efficiency programmes. In competitive retail markets, the cross-sell and up-sell opportunities are emerging rapidly thanks to this enhanced understanding and a 360-degree view of the consumer. This is driving demand for big data and analytics solutions and services across the lines of business.

Mobility concerns
Mobility seems to be another key trend in the industry it includes both enterprise mobility as well as consumer mobility. While utilities in the west have been early adopters of mobility, the adoption of the previous generation of mobility solutions was primarily for the field force.

Today, mobility solutions and services are in demand to help the field force be more efficient in completing work orders and enhance the operational efficiency of the office worker including executives. The ability to get real-time information from the field and respond to the crew is enhancing the safety, reliability and customer satisfaction scores. On the consumer mobility side, though, the demand is more on innovative solutions and providing consumers the ability to interact with the utilities on the go. During natural disasters, consumer mobility solutions on outage maps, two-way communications through channels like Twitter, Facebook and You Tube are becoming the norm.

Some of what we're dealing with is par for the course. For example, power utilities in much of the western world are experiencing a rapidly ageing workforce and an infrastructure that isn't getting any younger, either. We need to ensure that older, experienced workers effectively pass on their decades of specialised knowledge to the next generation to lead the industry. In addition, as the mega-storm that recently struck the eastern seaboard of the United States demonstrated, it's high time many utilities face the fact that much of the energy infrastructure in the west is well beyond its prime.

Sustained challenges
In India, however, we see a different set of issues. Rapid economic growth combined with growth of the consumer base makes it a huge challenge to expand a brand new energy infrastructure simply to keep up with demand. And the Indian government and private enterprise are still trying to figure out how best to work together to address the nation's energy concerns.

Indian utilities are trying to work out transmission and distribution issues. It becomes extremely critical for them to make the right kind of decision to distribute the optimal amount of power at all times. Because of the rapidly growing population, there can often be huge imbalances between supply and demand.

Apart from this, rural India comes with its own set of issues. There is a need for significant and ongoing investment on the generation side. The government is subsidising new plants, but not as fast as the burgeoning middle class is consuming power.

In urban areas, per capita consumption is also increasing. Houses have multiple television sets and air conditioners. These issues are not unlike what's happening in California: When many households plug their new electric cars into their home outlets to re-charge them, the grid suddenly has to generate the electricity to meet the needs of twice the number of households for which it was designed. The utility can't exactly meet a doubling in demand overnight.

Urban divide
Indian utilities have tremendous opportunities to manage demand in urban areas through use of smart thermostats and mobile apps to control consumption. There are disaggregation technologies available to manage consumption at the appliance level in homes and offices, which could significantly flatten the load curve if applied effectively. Pervasive availability of mobile devices makes these solutions more accessible and easy to use for the Indian consumer. A strong drive for self-generation, distributed energy resources and net metering can help address some of the supply issues in rural areas. Deployment of a strategic and long-term plan to encourage and support micro-grids will bridge the demand-supply gap in these resource-constrained rural areas. Given the frequent and prolonged outages in many parts of the country, strategically located distributed energy resource centres leveraging solar, wind, biogas, tidal and other options will continue to emerge as the best alternatives.

However, some issues facing this industry are common between the Indian utilities and their western counterparts. Regulation is a good example. Every government wants to make sure its energy funding is spent as efficiently as possible. Regulators are also helping implement the move toward more sustainable energy sources. Security, compliance and risk management are at the forefront.

Then there's the likelihood that the global industry is set for another wave of mergers and acquisitions. Given the global economy, regulators are keen to allow companies to merge and lower their operational costs. Doing so gives the end consumers some relief on their energy spend.

This could be welcome news to many utilities that are struggling to remain profitable amidst all these changes. Take, for example, the penchant for consumers to install their own solar panels. When individuals begin generating their own power, the prospect arises that a utility might be on its way to becoming an asset management company. Its business model has to change. At Infosys, we're helping companies come up with strategies to cope with this changing environment. For example, in the state of Arizona (US), a subsidised solar panel programme is in place. It's good for the planet, of course, but not for the current business model of utilities. How do you keep costs low enough especially when you want to go green? How do you recover costs when your large commercial and industrial customers move toward becoming more self-reliant with their energy needs?

Helping transformation
There are many IT companies going hand in hand with the industry for adopting innovative and advanced solutions. For example, Infosys has developed an array of tools and frameworks to help energy companies make important transitions. First, focus would be on agility of the supply chain and making the process of decision-making simpler. Utilities are being facilitated with tools to keep their data and information flow as smooth as possible. Truly, the energy industry might be going through some challenging times. But these are the kinds of challenges that Infosys focuses on helping companies and governments alike to solve. Because, when it comes to powering the planet, we think the coming century will be filled with as much promise and possibility as the past hundred years.

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