The Future of Utilities: A Partner Opportunity

Energy and specifically electrically powered devices and appliances are part of everyday life for all of us. However, the dependency on personal computing devices like phones, tablets, headsets and the likes has made us realize how important energy savings and battery efficiencies are! Who hasn’t experienced anxiety or even panic as your mobile phone is running out of battery and you forgot your power adapter and/or there is no charging point in sight! What would you be willing to give up at that very moment just for some power! Making sure that the electrical supply is constant and reliable is the main objective of every utility company in the world. Helping these companies achieve these goals is a substantial opportunity for Cisco and our partners more than ever before.

The Utilities market, just like every other industry, is going through major changes driven by new technology paradigms such as the Internet of Things as well as the convergence of Operational Technologies (OT), which enable an efficient management of the power grid and Information Technologies (IT), which are becoming a critical part of the main Line-Of-Business objectives. The Digital Transformation of utilities companies is the direct result of many mega-trends; here are some of the most important ones:

Grid Resilience and Reliability

Electricity supply is a matter of national security for every country, but maintaining its reliability is a challenge given the amount of transmission lines deployed globally.

“In the U.S. (alone) … 200,000 miles of high-voltage transmission lines and 5 million milesof local distribution lines… (connect) thousands of generating plants to factories, homes and businesses“[1]

New Technology Disruptions:

The relationship between electricity consumers and suppliers has changed with the connection of home appliances to the internet, allowing the end user to manage their power consumption in real-time.

“Sales of connected appliances will surge … from 30 million units sold in 2016 to 178 million units in 2020″[2]

Aging Workforce:

The US Department of Energy estimates that 25% of employees in electric and gas utilities will be retiring within the next 4 years.[3]

In the United Kingdom 52% of the power sector workforce is over 45 years old.[4]

Most utilities have been used to treat their clients as simple ratepayers for many years; however, the balance in this relationship is now changing thanks to technology, distributed energy resources and social media. There are many positive business outcomes when Utilities take a proactive approach by engaging their customers in their own terms.

Specifically, in the case of Distributed Energy Resources (which refer to renewable energy generation such as wind, solar or wave power which are now becoming more accessible for residential and business consumers) the paradigm is shifting as the prices of battery power storage is coming down, leading to what is known as the Internet of Energy.

All these changes are creating a perfect storm of challenges, prompting utilities to become ready for cybersecurity and physical security standards, to competing for vision, mind share and leadership, as well as to address the Digital Disruption that all these events are creating. Nevertheless, is this really a Disruption or an Opportunity?

Cisco leads Utility Digitization with the GridBlocks Architecture, which provides a holistic view of the communications requirements needed, however this is not merely about devices and pure connectivity. It´s about providing a reference architecture for our partners that enables them to assess the overall digitization requirements of their utility clients and apply IP protocols in new and innovative ways to achieve performance levels, which were impossible to achieve in the past.

The Utility industry knows that providing reliable and secure connectivity across multi-million intelligent energy devices on the grid and on premise is needed to manage today’s electric system and market operations into the future.

To learn more about Cisco’s Utility Solutions and Partner Ecosystem please visit our Digital Utilities site and our Industry Transformation Partner Guide Energy section.

References

[1] https://www.scientificamerican.com/article/what-is-the-smart-grid/

[2] https://blog.euromonitor.com/2016/11/the-global-connected-appliances-market-will-register-493-percent-growth-in-2016-2020.html

[3] https://energy.gov/epsa/initiatives/quadrennial-energy-review-qer

[4] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/306390/briefing-paper-ssa12-energy.pdf