By 2018, 70 percent of utilities are predicted to launch major digital transformations in response to the challenges faced in their current business model. For utilities, vendors, and regulators, the challenge is not just to examine and optimize existing processes, but also finding entirely new ways of conducting business in a digital grid across a vast number of areas and functions.
In 2015, the International Energy Agency said the U.S. would need to spend $2.1 trillion by 2035 on grid technologies and infrastructure to prepare for higher penetrations of renewables. For the most part, utilities are responding. The inner workings of utility agencies may be an enigma for consumers, but many experts predict increased transparency.
“As distributed energy resources and consumer-driven investments continue to grow, enhanced grid transparency and the ease of access to distribution system information are both key to unlocking the full range of benefits of these resources,” said Sara Baldwin Auck, the Director of the IREC Regulatory Program.
Utility as a Platform
To survive the digital age, utilities are realizing they must market themselves to consumers as something more than just a utility company. From mobile apps to gamification, many utilities are partnering with third party vendors to help users track and control usage, pay bills, report outages, and receive notifications.
“If utility companies can figure out how to become trusted energy advisors and a convenient energy resource, they can increase their validity in the market while helping customers better manage their consumption,” says Yoav Lurie, founder and CEO of Simple Energy, a utility as a platform company that aims to empower people to save energy.
Lurie believes the utility as a platform model is the way of the future for utilities looking to evolve. Utility as a platform uses behavioral science, big data analytics, and digital marketing techniques to change how people save energy and how utilities engage customers.
“Different utilities have different reasons for their energy efficiency and demand response programs, from mandates to avoided capacity costs, but perhaps the biggest draw of the platform is how it changes the customer relationship,” explains Lurie.