Electric utilities should look to the telecom industry to learn how to stay ahead of market changes

Citing the telecom industry’s openness to change, Adrian McNulty – VP Investor Solutions for IQGeo – outlines some of the main lessons that electric utilities can learn from telecom operators to adopt a culture of innovation and proactive planning for new technology and changing customer demands.

Recent social and business transformations are accelerating changes to electricity consumption patterns while driving up overall demand. Climate consciousness and rising gas prices are contributing to the adoption of electric vehicles and the Covid-19 pandemic has created a new remote working lifestyle.

This ever-changing usage pattern leaves electric utilities with increasingly complex prediction and management demands, combined with the added challenge of renewable energy sources such as solar and wind that are required to keep up with the decarbonisation efforts taking place worldwide. The effect of these changes is a rapidly evolving grid that utilities need to plan for and adapt to.

Utilities may find that responding to this new landscape will take longer than anticipated as many of the legacy systems cannot simply not handle the new demands. However, there are other industries that have had to respond to evolving demands on a similar scale.

The telecom industry, while having its own challenges and drivers, has transformed massively to upgrade and digitally transform their networks. For example, telecom operators have moved from cable and copper to fiber and 5G, reinventing their brands, managing new demands, and competing in a very aggressive market.

So, what can electric utilities learn from the telecom industry?

One of the biggest factors is the telecom industry’s openness to change. The market is highly competitive and telecom operators have learned that if they don’t review their technology and respond to change promptly, they will be edged out by the competition. This has created a state of constant innovation within the industry, enabling telecom operators to move quickly in the transformation process.

Below are some of the main lessons that electric utilities can learn from telecom operators to adopt a culture of constant innovation and proactively plan for new technology and changing customer demands.

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Prepare for every eventuality by modelling different scenarios

Telecom operators have gone through a generational evolution from copper to coaxial and from coaxial to fiber and 5G, and throughout this evolution, the requirements of the network have changed many times and the industry has responded with new network technology strategies.

At a macro level, the evolution that took place in the telecom industry is similar to that currently taking place in the electric utilities industry. The electricity infrastructure required to support new DER (distributed energy resource) connections, charging of the increasingly popular electric vehicles, combined with a renewed focus on achieving net zero goals following COP26 and many other factors has created a dynamic energy production and consumption cycle.

Innovative companies within the telecom industry learned that modeling different scenarios is key to evolving and managing parallel transformation challenges. Operators achieve this by creating accurate network digital twins that can be used to accelerate networking planning and design, while simultaneously responding to changing service level requirements.

Electric utilities have the opportunity to adopt a similar approach to managing the evolving state of the network. By embracing digital twin technology they can accurately model their network to create an agile technology framework that will respond more efficiently to current and future challenges.

Innovative telecom companies have taken the first steps in this process by abandoning the centralised legacy GIS (geographic information system) orthodoxy that is no longer fit for purpose and are relying instead on modern decentralised and mobile solutions that are open to all stakeholders and provide the agility to adapt to rapidly changing needs. By adopting the same philosophy, electric utilities can constantly assess the technology within the organisation to ensure it meets business needs, and if it doesn’t, rethink their strategy to remain competitive.

While the electric utility market has a different competitive market landscape, utilities can still benefit from the culture of innovation that is intrinsic to innovative telecom companies that are staying ahead of their competition.

Data from disconnected systems can cause operational risk

Another critical issue facing the electric utility industry is the increasing frequency of natural disasters and major events, a trend which is showing no signs of slowing. The UN’s 2022 Global Assessment Report on Disaster Risk Reduction stated that “the number of disasters per year globally may increase from 400 in 2015 to 560 per year by 2030.” Utility operators and dispatchers need to respond to this challenge by creating real-time network situational awareness, which can only happen effectively when critical data sources are viewed through a single source of network truth.

Without a reliable, accurate view of the network, the risk profile and incident response times can be drastically impacted.

Telecom operators have recognised that ‘swivel chair management’ of diverse applications does not serve their business needs and have moved to integrate all critical data sources and internal systems into a single view that supports the entire network lifecycle. Doing so improves real-time situational awareness and response times, as well as proactive planning and operational decision-making.

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Innovative companies, such as Chubu Electric Power Grid in Japan, are being proactive in the management of major events by using a shared dashboard that draws on all data sources. This gives Chubu’s teams in the office and field access to an accurate network view and enables them to quickly assess situations, decide on the equipment needed and rapidly create a response plan. Dispatch teams can tell field crews where they need to be and provide them with live traffic data and hazard maps to help them plan their routes.

Without having this complete integration of data, operators wouldn’t be able to efficiently and effectively respond to disasters, risking costly mistakes during emergency incidents.

Constant technological innovation will lead to consistent ROI

There is a huge amount of IT infrastructure that electric utility operators rely on to service customers and while these were brought on to address challenges the operator was facing, they often create new silos of information that can’t be easily shared and leveraged.

Following in the footsteps of the telecom industry, electrical operators can develop a culture of constant innovation, regularly evaluating their technology and working to integrate their data into a single shared network view and migrate from several disparate system into a single platform.

In addition to ensuring the best ROI, this strategy can deliver the innovative technology needed to meet technical, business and customer service objectives.

Integrate innovation into company culture

Ultimately, the biggest distinction between telecom and electric utility operators has been a difference in market conditions. Traditionally telecom organisations have operated in a competitive market and have been forced to continually innovate to stay ahead of the competition. However, times are rapidly changing for electric operators with new network demands and increasing competition. Taking a page from the book of the telecom industry and its transformation will serve utilities well for the future.

ABOUT THE AUTHOR

Over the course of his 25-year career, Adrian McNulty has held various technical, commercial and leadership roles in the energy sector.

McNulty has been fortunate to work and travel across the world covering the entire energy value chain, from generation to distribution. Currently, he leads the utility practice at IQGeo and is based in Atlanta, GA.