Look What Steers the Future of the Energy Industry!

Look What Steers the Future of the Energy Industry!

By Energy CIO Insights | Friday, September 06, 2019

It will be delightful to witness how power companies stabilize their investments in the ongoing operations against the plans of having a transformational change in the following years.

FREMONT, CA: Whereas the power and utilities industries are transforming rapidly, the traditional utility regulatory structure is taking time to match up with the quick advances. Nevertheless, some flexible regulatory initiatives are budding on the surface of the industry and are bringing opportunities to utilities in today’s world and beyond.

As the developments shine bright, electric power companies have also started tapping advanced technologies to provide the urbane customers. Notably, the customers who have been looking long enough for high-tech digital experiences offered in the industry.

The latest technologies are extending opportunities to enhance operational efficiencies and encourage implementations with new business models. Indeed, if the regulatory structures take a lot of time to adapt to the changes and fail to place themselves at a position to capture value from the modifies energy resources, then they might lose revenue. 

Various utility trends can be witnessed in the future, shaping the world and a few are:

• The consumers of electricity are familiar with the changes in the arena and still have demands that they want to be considered. The issue is that the progress made in the industry is entirely generational as the youngsters have gotten comfortable with online apps and social media. The changes can also be considered as a spin-off from the rising ubiquity of e-commerce in every sector, for products and services. The new normal in electricity customer desires include the choice in rate plans, sources of delivered electricity, and options to have access into behind-the-meter or localized sources of generation to assimilate electricity with other home services.

• The customers in commercial and industrial spheres are looking to add more cost and utilization control with prospects to self-generate and reduce the emissions from their energy use. Several utilities have started to respond to the situation by developing apps to provide customers with better control over energy usage. Apart from that, they can manage energy use from their smartphones, book online for rooftop solar installations, and view monthly bills. They can also keep track of the energy use in real-time, and get notifications if bills were higher than usual.

• Technology, along with different techniques, is extending opportunities to enhance operations as well. Companies can find sources of generation, with the cost performance and scalability of wind and solar that continues to develop year after year rapidly. The smart-grid technology provides real-time information into every element of grid status and the batteries available now offer different services. Many localized and distributed sources of energy have come up, allowing utilities to combine with customers and the industry to install and manage power systems personalized for particular needs.

• Furthermore, there are added opportunities for digitalization and incorporation of operational systems, back-offices, and supply chain management. The utilities need to move technological awareness and strategic thinking to the core of strategy and planning.

• The crossroads of customer empowerment and enhancement of technical choice is welcoming new business models for incumbent utilities, along with market structures in which the non-traditional players enter the marketplace. With the advent of behind-the-meter generation, community energy projects, and latest options such as rooftop solar combined with battery storage, utilities have a remarkable opportunity to extend profitable businesses. Companies can gain a massive amount of revenue from developments like installation, maintenance, tracking, and balancing the load along with on-grid resources.

• Modern business structure opportunities can provide new material for revenue growth, which carries more potential relative to the traditional utility model. Together the utilities and its transforming industry are looking to regulators, to make sure that their customers are fairly paying for the legacy costs. 

• Rising customer expectations might influence regulatory changes. In the meanwhile, the age-old cost-of-service organizational model might not encourage innovation; therefore, a few more flexible regulatory initiatives are rising to bring new opportunities. In quite a lot of economic sectors, variations in markets, customer needs, and technology can defy the abilities of regulators to match up. In the case of utilities, these changes can lead to a much more fundamental issue than in any other sectors. It is because the in-office regulatory structure at the state level governs much of what a utility can accomplish.

• The conventional utility regulatory model of cost revival and permissible rate of return on investments are likely to evolve and recognize the new technology options such as utility involvement in energy storage, cloud-based solutions, behind-the-meter customer solutions, and innovative technologies all through the business. Improvement in pricing structures and utility remunerations can enable broader operations of innovative customer service technologies.

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• With time, better flexible regulatory initiatives are coming soon. The initiatives include maintaining the advanced metering infrastructure as a way to enhance the value-added two-way flow of information between customers and utilities. It also provides storage mandates and targets that offer load balancing options to the services and even support for distributed power to the customer. The time-of-utilization rates, which includes price signals to the consumer to rearrange consumption of the off-peak utility investment.

Go With the Flow:

While the impact of changes moves forward, the electric power companies continue their core business of supplying dependable and affordable power. To meet this requirement, capital expenditures in the energy and utility sector steadily rise, with an increase that can reach as high as hundreds and thousands of billions.

Furthermore, it is expected to increase in the following years and might be seen covering multiple requirements in the generation, transmission, and distribution. It might also carry out modernization of the grids by constructing them in resilience to weather events as well as cyber threats. Companies can sooner or later begin employing modern technologies such as digital abilities or storage systems.

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