North Highland recently participated in the Oregon’s Energy Future Conference and heard perspectives about policy and technology advancements that are reshaping the future of energy in Oregon and the rest of the world. A summary of some of the key takeaways and implications for energy and utility companies follows.
As the federal government moves away from a clean energy and low carbon future, cities and businesses are stepping up to lead the charge.
The City of Portland, Oregon recently joined a network of more than 25 cities who have committed to obtaining 100% of their electricity from renewable energy. The City of Portland’s goal is to be 100% renewable by 2050 (Source Link). According to the keynote speech given by Oregon Congressman Earl Blumenauer, the business community is also supporting the nation’s advance toward a clean energy future despite the Administration’s withdrawal from international carbon commitments. This support is demonstrated by companies including Google, Microsoft, Amazon, and Apple that have committed to powering their global data centers with renewable energy. For example, Microsoft is on track to procure 50% of its electricity for its data centers worldwide from renewable energy by 2018 (Source Link).
Life-changing technological innovations are upon us.
According to presenter Steve Brown, CEO of The Bald Futurist, we will soon enter a world where “conversation as a service” will become the focus of post-mobile digital interaction, artificial intelligence will replace many jobs performed by humans, medicine will become customized to interact with our bodies’ DNA, and Virtual Reality will support augmented and mixed reality experiences. Steve equated these changes to the physical world coming together with the digital world to enable our society to build copies of the physical world to make it more intelligent in every way. He also spoke about a world where humans will be managed by algorithms and data will become the driving force for making all decisions.
Technology innovations will significantly change the way utilities operate in the future.
Utilities were advised by Steve to immediately develop “sensor,” “voice,” and “blockchain” strategies to reduce impacts and capitalize on opportunities posed by these technology innovations. Based on our experience providing management consulting services to energy and utility clients around the globe, what follows is a brief synopsis of the potential impacts and applications of these recommended strategies for energy and utility companies.
- Sensor strategy – Utilities are already investing in designing and developing an Internet of Things (IOT) sensor network to help them connect distributed assets, provide connectivity and data flow as a service, and support improved operations. For example, IOT sensor networks will enable utilities to ease peak-capacity requirements, smooth overall loads, and provide other system balancing and management benefits.
- Voice strategy – Utilities spend a significant amount of time and money training customer service representatives and responding to customer inquiries and complaints via call centers and other communications channels. Imagine a scenario in the future where automated voice technology takes the place of call center representatives and the voices used are tailored to the specific types of customers interacting via various channels to provide optimized interactions and cost efficiencies.
- Blockchain strategy– Utilities perform multiple transactions in the course of doing business, for example power purchase agreements, transmission usage agreements, land acquisitions, and contracts with customers and businesses to provide power services. Blockchain represents a way to encrypt digital assets and form trust between parties of an agreement to enable direct transactions without the need for intermediaries. For example, a utility may be able in the future to decrease the need for lawyers and banks as intermediaries in its financial transactions with suppliers and customers.
The general shift toward automation and decrease in reliance on humans to perform business functions will impact almost all areas of a utility. For example, in the near future, drones will likely take the place of human inspectors to travel to transmission lines and power plants and examine equipment to determine maintenance needs and customer call service representatives may be replaced by sophisticated voice automation technology.
As the saying goes, “Life can only be understood backwards; but it must be lived forwards.” Energy and utilities companies will either look forward to run their businesses more cost-effectively than ever before, or they can choose the path of “wait and see” and run the risk of becoming obsolete.