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Digitally Powered Utility : Digitally Powered Utility
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2 Building the digitally powered utility of the future An Australian perspective | A changing customer Infuenced by digital experiences in other industries, today's customer is informed, connected and accustomed to high quality, personalised and on- demand service. As a result, customers are demanding a radically new level of experience from their energy providers. The relatively large share of household and business spend for these services is also driving customers to take a more active role in conserving and generating energy. Customers are becoming energy producers and managers, representing a powerful shift that will prompt today's utilities to re-examine their role if they are to avoid becoming mere infrastructure providers. Meanwhile, consumer behaviours are changing as the millennial generation of digital natives enters its prime spending years. Meeting these new expectations in a digital world will be critical if energy players are to survive and thrive. A collision of technologies A combination of new digital technologies, such as big data, mobility, the Internet of Things (IoT), smart meters and smart grids, are quickly transforming how assets and operational processes can be managed. In parallel, new energy technologies are enabling commercial adoption of distributed generation that is disrupting the traditional energy value chain. According to the Australian Energy Council, Australia has the world's highest rate of household solar panel installation at 15%1 and the deployment of battery storage is expected to rapidly increase as technology matures and costs come down. These technologies are not only completely changing how our energy is generated and managed, but also ushering in a range of new competitors and altering how customers interact with energy suppliers. Ageing infrastructure and workforce In the face of rising energy prices, today's utilities are being challenged to increase performance and optimise capital expenditure by safely extending the life of older generation, transmission and distribution assets. This requires a new and more innovative approach to drive asset performance --- leveraging data and insights to make real-time optimisation decisions. At the same time, the impact of technology, particularly on customer service and security, is disrupting the skills needed in the workforce of today's energy company, just as many utilities workers near retirement age. In this new digital world, knowledge needs to be strategically managed and be effectively transferred to the next generation of digitally savvy workers. Growing stakeholder expectations Utilities need to meet higher demands from better informed stakeholders. Regulatory scrutiny has increased, consumer pressure over rising retail prices is growing, environmental demands are tougher and shareholders expect better performance amid volatile economic conditions. Energy players need to be increasingly commercially- minded if they are to grow new sustainable revenue and fne-tune their business performance. A new competitive market Energy players of the future will need to respond quickly, not only to disruptions in technology, but also from aggressive new market entrants. Industries such as communications, broadcasting, healthcare, transportation and hospitality have already been turned upside down by companies such as Netfix, Airbnb and Uber who have taken the concept of leveraging under-utilised capacity and new delivery platforms into the mass market. These competitors are also using digital channels to quickly lower costs to serve and enable new product offerings. The emergence of technologies that enable peer-to-peer sharing and the production and storage of distributed energy may see this type of new model rolled out even faster. New digital capabilities and the ability to adapt quickly will be critical to successfully compete in this new distributed market. 1. Source: Renewable energy in Australia --- how do we really compare? --- Australia Energy Council, June 2016
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