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Supratik Chaudhuri is the director of utilities at digital consultancy Publicis Sapient, North America.
As we approach the one-year anniversary of the February 2021 deep freeze in Texas, in which more than 700 people are said to have died as a result of power outages, U.S. utility companies may still be unprepared for the next extreme weather event.
In fact, responding to our recent survey, only 1% of U.S. utility companies could say that they are fully prepared to accurately predict when power will be restored following weather-related outages, highlighting what the Texas storm made clear: the inability to use data for insights can have deadly consequences. The problem is much larger than the storm in Texas: across the nation, electricity blackouts have increased 60% during the last five years, underscoring the growing need for a more effective outage response, which enables both utility companies and customers to plan how to deal with outages, saving both lives and money.
In order to fulfill the obligation of reliably providing the essential service of electricity, utility companies need to embrace new technology and new ways of working to transform operations. Extreme weather events are set to increase, and the necessary shift to renewable energy will add additional volatility to the power supply. The variability in weather and power supply is a given, but data-driven insights can help make sure reliable power supply is a constant for customers.
In order to gain those insights, which can mitigate the impact of blackouts, and help predict when they will occur, and how long they will last, utility companies can take the following three steps:
1. Using data to predict demand and supply in the future for utility companies
It has long been known that very hot or very cold weather causes customers to use more power, cooling or heating their homes. But predictions about how much the load will increase often rely on historical data. These should instead also include real-time data as well as data extrapolated for future scenarios such as demographic changes, growth in electrification, adoption of renewables and microgrids that can cause demand spikes. This allows companies to model the future and plan for risk mitigation strategies. For example, an affluent dense suburban neighborhood in the future is likely to have higher demand on the grid when thousands of EVs start charging. However, the growth of EVs often sees a correlated increase in rooftop solar, which can mitigate some of the demand. Knowing what all the future scenarios can look like and stress-testing them for situations such as extreme weather events will be a critical part of risk assessment.
Just as important as understanding demand is the ability to understand and predict supply with real-time and forecasted data. For example, utilities need to take into account the retirement of fossil generation plants and nuclear plants, the growth of renewables and storage, future prices of natural gas, and other parameters. These supply forecasts also need to be stress-tested for scenarios such as intermittency levels of renewables, the health of aging field assets, climate risk, and more extreme scenarios where tightening of a certain input can have cascading effects, as what was seen with natural gas supply during the Texas storm. To make this possible, companies need to embrace prediction platforms that integrate real-time data about both demand and supply from many third-party sources,
Using data to predict and manage supply will become even more important as utilities shift to renewables, like solar and wind. While storage solutions are set to improve for these renewable energy sources, they remain expensive, making the transition to renewables another source of volatility in the power supply, especially as weather patterns continue to become more extreme. That is why 82% of utility companies, according to our survey, see the transformation to clean energy as a significant challenge when it comes to maintaining service. This underscores the need for incorporating better energy-specific data analysis to ensure that the energy environment of the future can be flexible and stable at the same time.
2. Create one dashboard or platform to rule them all
Customer-sourced data remains under-utilized for outage response. Our recent survey found that only 2% of respondent US utilities companies were fully prepared to collect and analyze data, like reports of outages, fallen trees, and damaged power lines, from customers following an extreme weather event.
Ideally, utility companies should incorporate such customer data, along with grid and other data, into one platform, offering a single dashboard view that takes all of these factors into account. Unfortunately, utilities struggle with having numerous disengaged IT and OT (operational technology) systems for siloed groups of users. Many utilities struggle to develop enterprise-wide data management programs as the focus tends to be limited by specific use cases and not around what is needed to drive overall customer-centric outcomes. Additionally, utilities often overcompensate in their investments on the technology side but fail to note that people and processes are often the biggest hurdles to the successful adoption of new technology. Investing in a robust change management process is critical here.
A single data platform that integrates and curates data from different systems not only allows a single dashboard view of the state of the grid, it also enables customized views that different business groups can use for their own efforts that contribute to improving the overall situation. For example, the Australian electrical company Ausgrid recently incorporated customer, grid, weather, and other supply and demand prediction data into one platform, significantly shortening power restoration timelines, partly because insights from the data allow utility companies to bring in enough personnel ahead of time to deal with outages quickly. Similar reductions in power restoration timelines have been seen at EPCOR Utilities in Canada, which also recently switched to an integrative single-view platform that takes into account customer data, including customer-reported outages.
Companies also need to become savvy in the manner they communicate with customers to change consumption behavior. Instead of talking esoteric terms like kWh, utilities need to talk in terms of dollars and cents that customers are more likely to understand. Additionally, customers from different demographics respond differently to messages around reducing power usage. Executing multivariate experiments around personalized communications that take into account demographics, preferred communication channels (web, text, apps), time of the day and more can have a bigger impact on customers’ power usage, as our work with the Ontario Energy Board has shown.
Another often-missed opportunity for the utility is to do post-event engagement with customers to understand how they could have done better. Sometimes customers calling in about an outage are looking for more than just restoration times, they could be trying to find out about the closest storm shelter or access to water, food, and other necessities, and utilities need to be looking out for how they can alleviate such hardships.
Clearly, rather than relating to consumers simply as rate-payers, as has traditionally been the case, utility companies need to relate to them as customers, who not only need personalized service, but can help contribute to improvements and drive changes and innovation. This can help reduce demand at peak times and provide convenient avenues for customers to communicate with the utility, providing real-time reports about outages, fallen trees, and other issues as they arise.
3. Modernize the grid
Upgrading the grid through hardened assets, more sophisticated sensors, and advanced OT systems as well as innovations like distributed energy generation, microgrids, and P2P power sharing provides the foundation for the smart cities of the future that can balance requirements of increased electrification (e.g., EVs) against the intermittency of renewable generation.
The challenges that utilities face are not going away: extreme weather is here to stay. And with electricity generation making up 30% of US carbon emissions, which contributes to the phenomenon of climate change that is sparking extreme weather, there is no choice but to move to renewables. The stakes are also increasing on a human level: a recent study found that two-thirds of residents in cities like Atlanta, Detroit, and Phoenix face a risk of heat exhaustion or heat stroke if electricity were to go out for an extended length of time during the summer.
It is increasingly up to utility companies to prevent such disasters and loss of life. And to do that, they need to start with digital and data transformation, to at the very least, better predict where, when and what power asset will go out, and for how long, but, ideally, to prevent outages in the first place. Ultimately, utilities will be able to use this data to change the way people consume — and think about — energy.
Supratik Chaudhuri is director of utilities at Publicis Sapient, North America.
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