Cooperation gives utilities edge in disruptive market

Cooperation gives utilities’ more power in disruptive market

How and why should utilities consider more frequent discussions between themselves in these challenging times? The Africa Utilities Technology Council invites decision makers from across Africa’s utility sector to investigate this question.

Africa is rising, Africa is digitizing, and utilities should be in conversation with each other to find ways of helping communities better access their services, said Mlungisi Mkhwanazi, Director of Africa Utilities Technology Council (AUTC) during African Utility Week.

An opportunity to navigate change together

The inevitable change that time brings is no different to utilities, who are asking how they can remain sustainable in the face of the renewable energy revolution where advances and lowered costs in off-grid technology, combined with ever-improving battery storage, are enabling customers to generate and store their own electricity and be self-sufficient, explains Mkhwanazi.

Taking advantage of the Internet of Things (IoT) is key to utilities abilities to provide a better service with smaller budgets, and adapt their business model to reflect the new opportunities provided by modern technology and digitization.

“The good news is that you can start with what you have and build your assets along the way,” said Roger Bryant, IT Project Manager at Southern Company Services and Chairman of the global Utilities Technology Council.

Quite literally, the Internet of Things is made up of physical devices, like sensors and tags that are connected to the Internet, monitored and often controlled remotely.

“Through this interconnected network of sensor technology and business processes, data is gathered from the grid and through active management and better informed decisions, can be used to help it become more resilient”, said Bryant.

Utilities’ business models are changing

The utility business cases are changing with many being forced to move beyond the “cost of services” model. IoT is seen as one way to help navigate this challenge as it relies on a successful partnership between business and technology.

“Because IoT integration is a key reference framework, we need to make it adaptable so that it can be modified, grown and scaled. And, for that matter, it needs to be able to contract as the demand changes,” explains Bryant. “Southern Company has started to talk about ‘crawl, walk, run’ with regard to IoT and although some may be at the ‘crawl’ stage,they shouldn’t rule out revenue generation through IoT.”

By way of example, batteries are being used increasingly more frequently for a greater number of uses. Why not have an application to inform you of the level of charge of the battery? This data creates an opportunity to do predictive maintenance, and so save on the number of service trips performed each year. With that data utilities can easily see which battery banks give consistently faulty readings or where they need replacing. Increasing cash flows for any utility is not just in the amount of revenue brought in, but also in the amount saved providing the same quality of service.

What stops change at utilities?

“So, the question arises, why is decision making in utilities sometimes too slow to take advantage of technological improvements?” Bobbi Harris, Vice President Market Strategy and Development at UTC, asked to the African Utility Week audience.

Responses varied, in larger organisations, like Eskom, it was agreed that as more stakeholders need to be engaged for the decision, and each of these stakeholders first consider their own priorities, they first look at how the foreseen improvements will impact their department before deciding to support, oppose or be apathetic towards it.

“Instead we need to ask, ‘What is best for the network?’ If I no longer work at my utility tomorrow, then my decisions must be made in the best interest of the network and not on what is most convenient to me,” commented Nevin Nel, Eastern Cape Regional Project Manager at Eskom Telecommunications.

What about when the stakeholders’ skillset will be eclipsed by the technology improvements they are being asked to approve, challenged Mlindi Mashologu, of Telecom Network Engineering at Transnet Rail. Some state organisations are viewed as creators of employment, and so they will take the view that retaining and sustaining the number of those employed is a fundamental priority.

Utilities’ wide reach helps urban and rural audiences

A clear understanding of priorities is fundamental for any utility, and perhaps instead of trying to prevent change out of fear of the unknown, or that increased operating efficiencies will cause unemployment, the opportunity cost should be considered.

What will happen if utilities do not become better at change management? Utilities have the opportunity to ask the question of how they can participate better in the fourth industrial revolution, especially considering the geographical range of their services, which often stretch deep into rural areas.

In the absence of commercial operators providing a service, utilities’ technology choices have enormous potential to serve their captive audience in a manner that benefits the communities far beyond just receiving the intended universal service.