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Experience, Efficiency & Ecosystem: How Has Digitization Created a Different Role for Utilities?

The utility industry’s challenge is not just to review, optimize, transform existing processes and business models; it is about finding new ways to conduct their business. This space has many players with different challenges, evolutions, technologies, and transformations.

The utility industry is traditionally a slow implementer of technology. But the prospect of making the sector future-proof as competition increases is inspiring the industry to enable the smart infrastructure, processes and meet customer demands with the data it needs.

According to ABI Research, the industry will spend USD 14 Bn a year by 2023 to modernize and build smarter infrastructure. Overall, IoT, artificial intelligence, edge computing, along with other technologies, play an essential role in the scope of Industry 4.0.

The connected utility infrastructure will have doubled in size by 2023, exposing utility companies to various cybersecurity risks. Since the industry is a critical infrastructure, cybersecurity is essential.

Utility companies have no choice but to use systems to trace personnel for accountability, detect unauthorized activity in critical systems, unauthorized physical access, malicious party access, and account management.

The Challenges

The utility value chain is complex. Some of the challenges of this sensitive market include:

  • Classic – Natural resource is not endless. There is increased attention towards renewable energy and storage, distributed energy sources (DER), and more – whereby some of these are impacted by regulations.
  • Regulatory – The industry has long- and short-term challenges and opportunities across the value chain, regions, countries, and application areas. While some regulatory initiatives involve catching up with changed realities and enabling innovation, others include stringent rules like the environmental front.
  • Technological – Evolving technology is both a challenge and an opportunity enabler. Utility providers are racing to implement some technologies while those who do not are losing customers. Big data, the Internet of Things, analytics, and artificial intelligence are among them.
  • Business – Some utility companies’ success depended on oil (crude oil) supply. Since data is the new ‘oil,’ data can shape insights so that utility companies can optimize operations and customer engagement.
  • Competition: There is heightened competition as a direct or indirect result of regulatory and technological changes. With disruptive elements like digitization engulfing industries, utility companies change their business models to provide a digital customer experience.
  • Macro-economic and geopolitical – In recent years, energy sources have become a source of conflict between nations, reshaping how nations are sourcing energy and reviewing existing dependencies. Energy is a tool to forge partnerships challenging geopolitical balances.

Visualizing the technological canvas

Technology that will play a part in the evolution of the utility industry:

  • Internet of Things (IoT) – A 2015 research said that there are 299 million IoT units in the utility market, ranking next to manufacturing. There is an investment into energy efficiency management, smart meters, smart grids for electricity, gas, and water representing the main case use.
  • Edge computing – Analytics and data storage happen closer to the distribution source, improving response times. By 2020, 65% of power, gas, and water companies invested in edge computing/analytics, helping them optimize their assets and strive for operational excellence.
  • Big Data – With the rise of smart devices and an influx of data, it can turn inefficiency on its head and provide competitive benefits to companies. Predictive analytics will put utility companies at an advantage impressing customers.
  • Machine learning and artificial intelligence – Algorithms can predict grid failures and allocate energy based on demand. It can automate signal intake, perform load management functions and predict where maintenance is needed. With reduced downtime, companies can avoid customer dissatisfaction and the resulting financial losses.

A new world order

There is an emergence of dramatic change in the world of utilities.


The shift from a product-centric to a purpose-driven approach is compelling utility companies to partner with builders and developers for new connections and with customers for demand-side management. Building a digital ecosystem with partners, customers, and competitors generates exponential value.

Utility companies partner with other organizations across industries to provide a one-stop solution for end customers, co-operate and provide support during disasters.

Understanding customer personas such as tech-savvy, cost-conscious, eco-friendly, or comfort-seeking customers will help customers provide personalized experiences and be a flexibility provider, affinity service provider, or value creator. These capabilities serve as efficiency levers, helping them make accurate market predictions for the right ecosystem.


Successful implementation of digital technologies can improve cost efficiency by one to four cents per kilowatt-hour in power, says a study. Digital can improve efficiency across the utility value chain, starting from heat rate during generation, inspection in transmission, field worker productivity, and bidding in the market.

It also enhances the effectiveness of customer service agents in retail and orchestrates a distributed energy ecosystem (DEE) for behind-the-meter services.


Parallelly, there is a focus on improving customer experience by empowering them to complete account transactions with fewer and easier steps on any device, anytime, and anywhere.

While some companies provide subscription services for electric cars with home charging, some are creating online-only brand experiences for digitally savvy, cost-conscious consumers with 100% renewable products. These initiatives will complement energy with non-energy services, including e-commerce, insurance, mobility, and healthcare.

They will create moments of truth and new revenue streams. It can incentivize customers who participate in utility virtual power (VPP) plans or provide dynamic tariffs for customers like plunge pricing for using excess electricity in the grid.

Draup is an efficient data monetization analyzer. The utility industry can use Draup’s AI-driven sales empowerment tool to provide sales teams with robust data on the prospect’s business intentions.