July 16, 2014

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Journey from being a “Utility” to a “Smart Utility”

Nowadays, there are several buzzwords we hear concerning “smart utilities”, “smart grids”, “smart cities”, and more. However, before initiating the journey from “utility” to “smart utility”, here’s a quick look at why IT automation is so crucial to the successful recovery from the malaise that plagues this sector.

The critical need for IT automation

The Indian power sector is marred with technical and financial woes, and most of its reforms, policies and planning resonate the critical need for IT automation in this sector. Amongst the many factors, the most important ones are the dilapidated transmission and distribution infrastructure, huge energy losses, demand-supply gap, scarcity of generation resources, lack of regulatory clarity, and several other socio-political-economic factors.

According to the Central Electricity Authority (CEA), India faces energy and peak deficits of around 3-5% (Feb. 2014). This is further aggravated by huge energy losses in the range of around 25-30%. Some of the Indian States report energy losses as high as 65% (Sikkim), 63.80% (J&K), 37.80% (Chhattisgarh) and 36.7% (UP).

However, Information Technology (IT) is quickly changing the business value chain of several industries, and the power sector can’t be side-lined much longer. IT enablement of utilities - which are in line with their business goals - is crucial to improve operational efficiencies, reduce losses, improve the sector’s financial health, and enhance customer experience through a better and improved quality of services.                              

Levers in the transformational journey from a “utility” to a “smart utility”:

  • GIS Mapping & Customer Indexing : This allows utilities to increase customer coverage, regularize  unregistered/ unauthorized connections, conduct audits, and assess the demand-supply situation
  • Automated Metering Infrastructure: This helps utilities improve their financial health as they can collect revenues accurately by comparing the connected load, billed amount and the revenue collected.
  • Energy Accounting & Auditing: This allows utilities to implement loss reduction measures.
  • Supervisory Control & Data Acquisition (SCADA): This helps utilities in the process of delivering quality and reliable power.
  • Distribution Network & Grid Automation : This helps utilities improve operational efficiencies by ensuring a stable and reliable supply of power
  • Outage Management Systems: This helps utilities effectively identify faults, and isolate and rectify them.
  • Enterprise Resource Planning: This helps utilities reduce cycle time, improve service quality, optimally utilize resources, and make speedy and effective decisions.

These levers can be implemented in phases to achieve short- and long- term objectives. The short term objective should be to reduce energy losses and hence improve financial health of the utilities. The increased revenues can then be injected in to the long term objectives of increasing operational efficiency and customer service excellence. This will help companies move towards the development and deployment of “smart grids”.

Steps toward achieving IT automation

The primary step towards IT automation is asset mapping, customer indexing, and asset optimization which helps gain efficiencies and enhance customer satisfaction. Another important requisite is obtaining a single view of data across an organization, through platforms that consolidate both, business, and customer-related data. The utilities may also deploy A case in point

And so, we see that the IT automation of the sector has opened up immense opportunities for IT vendors. It is imperative that utilities choose vendors that can provide them with the best-fit technology aligned with their business strategy. The utilities should assess vendors basis who can offer IT transformation coupled with business transformation. A vendor of choice should be the one who can help them tackle technical/commercial losses, unlock capital for investment in smart technologies of the future, and deliver superior customer service. Thus, despite the plethora of IT companies offering their services, utilities will eventually be able to choose IT vendors who are willing to partner with them in their journey, and take them from being mere “utility” to “smart utility” companies.