How The Global Crisis Accelerated Digital Innovation In Utilities
The upside of the unexpected global crisis was how it has driven innovation and fast-tracked digital transformation initiatives. This is especially true for utilities, a highly regulated and essential sector, which simply could not fail to provide services that are critical to the health and safety of millions of people.
Digital transformation in utilities was already a focus for many, but typically within a long term strategy. But, the pandemic accelerated digital innovation in utilities, because as McKinsey put it:
Over a short period, the world “vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks.”
Leaders at utilities had to fast track digital initiatives in order to service their customers. Fortunately, they definitively leaned into the world of digital transformation.
While the pandemic and its impact on the industry was no picnic, we can look back on the first half of 2020 and recognize the digital “lemonade” that the utility sector made out of a heaping load of “lemons.”
Let’s take a look at how the pandemic has fueled digital innovation in utilities:
Improving Resiliency of Critical Infrastructure
The most important job of utilities is to keep the power/water/gas flowing. This becomes even more critical during a time of crisis when essential services such as hospitals and public resources need to perform their functions.
The pandemic pointed a spotlight on the importance of keeping critical infrastructure operational in a crisis.
In light of this, experts looking at the utility sector note how “Innovation will emerge as an even bigger opportunity, as we look to improve the resiliency of the critical infrastructure and further enhance our ability to provide business continuity in times like this.”
Virtual Energy Efficiency Audits
Today’s customers are (mostly) aware of the importance of energy efficiency, and so, assisting customers to improve the energy efficiency of their homes is a win-win.
Utilities want to keep aggregate demand low enough, so that the grid doesn’t get overwhelmed, while customers want to save on their monthly bills, using such energy retrofits.
During COVID-19, helping customers (particularly lower-income households) to find ways to reduce their power bills was even more important amid the economic turmoil. But, having a utility worker make a house-call to do an energy audit was no longer feasible.
In response, utilities took the energy efficiency programs virtual. Using the digital communication capabilities of video calls and web conferences, utilities connected directly with customers and took a virtual tour through their home to identify potential saving opportunities.
In a sector where 17% of the nation’s energy efficiency workers had lost their jobs, these digital tools are a life-saver.
Expect to see these virtual walkthroughs become more common, even in a post-COVID world.
Communicating Changes to Daily Operations
Despite the growing acceptance of paperless billing, many customers still paid their utility bill in person. However, COVID-19 caused in-person service centers to close temporarily.
Some utilities found the ability to accommodate these customers by providing in-person payment options for them via outdoor payment kiosks that don’t require in-person contact. This is a great response to a new problem, as long as the options are adequately communicated to customers.
Using digital tools, utilities can identify customers who typically pay in-person and use any number of pre-established digital communication channels to relay that information. However, it’s important to provide additional support to new users of digital channels, and not to assume they are comfortable enough to continue doing so when in-person service options return.
Maintaining Software Infrastructure for Remote Staff
Another customer comfort is the ability to talk to someone directly about their questions or issues. Again, the challenge during the pandemic was that employees were safest staying at home, rather than going to work at the customer service center.
The best-prepared utilities were the ones who recognized the need to be prepared for any emergency situation and had the software infrastructure in place for customer service representatives to continue their duties remotely. These utilities made provision for service reps to help customers via cloud-based tools. However, for those that were ill-prepared, pivoting to a remote means of communication and service provision has proven to be challenging.
Utilizing Energy Data for the Best Results
The COVID-19 situation reinforced the advantage of having the means to collect and dissect data. The constant collection of data from Smart Meters, for example, creates a treasure trove of opportunities to learn and react. This awareness of when commercial power starts to ramp up, is just one example of the information a utility has access to.
“As companies decide to re-open, and as customers decide whether or not to actually do business with them, utility companies will be among the very first to know.”
There are many other examples of valuable information that can be determined, as a result of digital innovation in utilities:
- Calculating the impact of the quarantine on utility demand
- Understanding how remote working impacted residential trends
- Calculating whether peak demand changed in timing or magnitude
All of these can be studied by the digitally minded utility to gain unprecedented insights. Notably, utilities can explore these trends because of the data collection capabilities of digital channels.
What’s the Common Thread?
There is no doubt that COVID-19 accelerated digital innovation in utilities. The best way to handle such a transition is to recognize what new opportunities are available and how the lessons learned can be optimized for the future benefit of utilities and customers alike.
When assessing the rapid evolution that operations at utilities had to undergo, one conclusion becomes clear: each and every one of these digital advancements relied on communication to achieve maximum success.
Matt Chester is an energy analyst in Orlando FL, by way of Washington DC. He studied engineering and science & technology policy at the University of Virginia before diving into the world of federal energy policy.
Today he runs Chester Energy and Policy LLC and publishes his blog at ChesterEnergyandPolicy.com in which he shares news, insights, and advice in the fields of energy policy and energy technology. You can also see Matt’s work on energycentral.com where he serves as a Community Manage with a utility industry focus.
Matt is writing a series of guest blogs for Doxim, focusing on paperless billing and digital communication in utilities.
For daily quick hits on energy and utility topics, you can follow him on Twitter at @ChesterEnergy.