Bridging the gap between distributors and customer

Oracle Corporation Australia

By Matt Gleeson, Oracle Utilities Regional Vice President at Oracle APAC
Monday, 15 September, 2014


Recent developments in the utilities industry have made one thing very clear: for energy companies, doing business the way they have until now no longer represents a sustainable course of action. With the federal government’s proposed changes to the carbon tax set to lower electricity and gas bills (or, at least, create consumer expectations that it will) and new entrants to the market such as in-home renewables and localised generation facilities growing in popularity, distributors will have to expand their services to accommodate these shifts in the energy landscape.

The key to creating a successful future plan for utility companies lies in their adoption of a sound data-analytics strategy. Energy distributors have been benefiting from data analysis to manage their networks for years, but with the roll-out of smart meters, and the advance of the consumerist world of social networks demanding instant information gratification, a utility that embraces big data will position themselves to implement change and innovation like never before. 

Smart meters will provide utility companies with a deeper vision and understanding of customer consumption patterns that will, in turn, bring them closer to the people and businesses they serve. Equally importantly, it will allow asset planning on an unprecedented level of intimate understanding of the demands by region, consumer type and even per individual property. As a result, they will be better positioned to help customers moderate their usage, as well as their bills, while providing a more reliable network grid through asset planning and proactive maintenance. The result is both consumers and distributors are blessed with the opportunity to lower their costs.

Engagement is the name of the game for retailers and distributors

In the age of social media, when a conversation between one utility provider and one customer can evolve into a group discussion with thousands of people in an instant, setting a new standard for customer satisfaction and engagement will be critical for energy companies as they look to strengthen ties with the people they serve. The recent repeal of the carbon tax means energy companies no longer need to factor the costs of carbon emissions into their business-making decisions, but rather encourage more sustainable energy use among their customers.

With natural disasters and weather unpredictability having a major impact on the annual costs of sustaining a reliable power supply to consumers, the ability to take data from a vast number of sources and perform advanced analysis to anticipate and respond to emergencies will feed positively into how utilities survive in the social-media age of brand appreciation or annihilation. On a day-to-day basis, the analysis of smart-meter data will play a major role in helping distributors to strengthen the customer relationship, not only by promoting more intelligent energy use but also by enabling them to resolve service issues more proactively.

Impending changes to the carbon tax are set to reduce retail electricity prices by $200 per year, benefiting cost-conscious and sustainability minded customers when it comes to their energy use. As smart meters hit each property around the country, customers will expect their energy companies to provide them more granular information on their consumption habits so they can determine the cost of what they consume and how they may curb their lifestyles to keep their costs down.

The collection and conversion of smart-meter data into actionable insights for customers will provide the impetus people may need to make small changes in behaviour - replacing ineffective hot water systems, reducing their air-conditioning/heating demands by a few degrees, insulating walls, buying smart appliances - all of which can translate into significant reductions in their long-term energy expenses. 

Avoiding peak costs on peak days

Improving customer engagement and promoting more sustainable energy use can also help utilities lower their operating costs on peak consumption days.

At varying times, generators and network operators build up significant amounts of excess generation and distribution capacity just to accommodate the levels of energy use reached on a few peak-consumption days and hours.

Building peaking plants or purchasing additional power on the open market can help utilities satisfy the needs of their customers during peak periods, but these measures are expensive to implement in the current market. These costs ultimately find their way back to the customer in the form of higher energy bills.

The advent of photovoltaic home generation units on a wider consumer market level also adds the complication of having more generated load than there are consumers requiring it. This is placing additional demands on the network grid and causing distribution companies a whole new lot of load-balancing and demand-planning headaches.

The answer for energy companies lies once again in boosting customer engagement to drive more sustainable energy use. At the core of this endeavour lays data analytics and strong engagement strategies, with utilities making the most of this technology to uncover new insights about how people consume that they can instantly share with their customers. Energy companies can establish more meaningful and actionable conversations with the people they serve, which can in turn encourage both parties to work together towards driving down consumption at peak times, keeping energy costs to a minimum. 

An open exchange benefits all

The dual factors of consumer cogeneration and the delivery of smart metering to the domestic market base are bringing customer engagement to the forefront of utilities’ business strategy, making it a major priority alongside demand response efforts and crucial network-management efforts.

With modern big-data appliances now offering energy companies such an in-depth view of peoples’ energy-usage patterns, a dynamic information exchange between distributors and their customers will be central to driving more informed, sustainable consumption and a more robust network. As engagement between all parties increases, energy companies will be able to optimise their networks while keeping their operating expenses in-check. For their part, customers stand to benefit from an increasingly efficient and economical energy supply

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