Big Data: The Future of Energy and Utilities
Today’s energy and utility companies face an unfamiliar landscape in which they must integrate alternative energies, expand situational awareness across the system and deepen their relationships with customers, while continuing to do what they have always done—delivering reliable, safe and affordable energy to everyone. Organizations that want to expand their business are adopting analytics to increase agility and responsiveness, reduce operational costs and improve asset reliability.
Analyst firm GTM Research predicts, global utility company expenditure on data analytics will grow from $700 million in 2012 to $3.8 billion in 2020, with gas, electricity and water suppliers in all regions of the world increasing their investment.
Big data is a critical element to solving key business problems for utility companies. It can turn the information from smart meter and smart grid projects into meaningful operational insights and understandings about their customer’s behavior.
As smart grid and smart meters become crucial to the industry, they will likely start generating hundreds of terabytes of data every year—or unstructured text data compiled from maintenance records and Twitter feeds. The accuracy, breadth and depth of these new data points present new opportunities for the utility companies that are prepared to take advantage of them.
Meanwhile, becoming a customer-centric, information-driven organization is no longer simply an option for most utility companies, it’s a business imperative. Technology shifts, regulatory changes and the emergence of empowered consumers all demand a new approach to customer engagement. With analytics, energy companies can make the shift to engage with customers in highly personalized ways that can increase customer satisfaction, lower the cost of service and promote new products and services.
For utilities to compete in this new environment successfully and ensure safe, reliable, affordable and sustainable energy, they will have to fundamentally transform their current business processes. Utilities must leverage big data analytics to help them translate data into actionable insights, enabling better operational decisions. This includes predictive maintenance, power quality optimization and demand response analytics—among others.
The analytics opportunity for utilities is clear, but there continues to be a lack of real push and value delivery. What is holding utilities back? Companies have been concerned about the high costs and complexity of data. To reduce those concerns, organizations simply need to take a structured approach. This change begins with a realistic review of their analytics maturity levels: where they want to get to, and what they want to achieve. That framework gives a baseline for key investments and initiatives. Utilities can then identify the right data sets and the smart systems they need, invest in the right skills and put in place the right data governance model. Within this structured approach, utilities should be on the side of pragmatism.