Smart metering is an important lever for the utility industry’s next-gen services and its potential impact cuts across key business outcomes
With smart meters bringing data into sharp focus, businesses need to build analytics and technology capabilities to drive efficient and effective operations
Ability to capture, organize, store and analyze data will be a key differentiator in the immediate future
Change has come to the utility shores faster than many had imagined. For traditional suppliers, there is an imminent need to drive transformation in customer experience and business operations. A report by the Office of Gas and Electricity Markets (Ofgem) emphasizes how traditional players have been losing ground to new and more innovative challengers. Factors such as digital are increasingly creating a level-playing field and the pace of innovation, underpinned by technology and analytics, will determine the leaders and laggards.
Undoubtedly, smart meters have been the focal point of utility transformation. A landmark initiative in this area has been the U.K. government’s aim to install ~50 million smart meters across all homes and small businesses by 2020. According to the Department of Business, Energy and Industrial Strategy (BEIS), smart meters are expected to reduce demand on call centers for billing issues, creating savings of GBP 2.20 per meter per year and another GBP 2.2 per year from better debt management. Further, it is expected to reduce theft by ~10 percent, resulting in benefits of GBP 0.29 per meter per annum for electricity and GBP 0.36 per meter per annum for gas.
Globally, the smart meter market is expected to roll out 558 million units by 2022. Smart meters not only reduce cost, increase revenue and improve process efficiency, they also impact the perennial pain point of energy companies, namely customer experience. Apart from improving the experience in areas such as billing, smart meters also enable quicker resolution to outages.
For example, customers may face a ‘no light’ situation due to an issue at their own premises or because of a major outage caused by a storm or heavy rains. Both require different resolutions. However, in both scenarios, it is important for the utility company to receive information about the outage. Smart meters have the ability to send out signals, called the last gasp message enabling energy companies to quickly assess the impact and take action.
Smart metering is a foray into the age of data-driven utilities. Harnessing data efficiently with analytics will be a huge business priority. The WNS DecisionPointTM Report dives into specific areas of analytics usage, including:
Asset Management Analytics to assess probability of asset deterioration and forecast failure risk and annual performance of assets. The long-term impact includes optimum asset utilization by identifying underperforming assets and prioritizing maintenance
Outage Management Analytics to conduct geo-spatial and power reliability analysis, and develop outage risk models. The long-term impact includes outage prevention due to accurate predictions and significant cost reduction as a result of improved contingency plans
Customer Operations Analytics to provide a consolidated view of customer behavior and attributes across billing, customer relationship management and social media platforms. The long-term impact includes ability to offer tailored customer services / programs / incentives based on incisive insights
Revenue Protection and Theft Reduction Analytics to assess fraud and theft by monitoring patterns in consumer usage data. Real-time information about load can help detect energy leakages and drive financial benefits. Analytics will help in reducing cost-to-serve and enable enterprises to chalk out long-term investment plans towards distribution planning
Demand Response Analytics to forecast the consumption pattern at each level of distribution such as customer and grid. Accurate and real-time energy demand forecasting will assist in timely and economical demand and supply management. Impact includes optimized procurement costs, reduction in asset maintenance costs through efficient power distribution and enhanced marketing return on investment for demand response initiatives
With data-driven intelligence becoming the key to survival and growth, the onus is on utilities to establish mature business processes and analytics. Aligning business goals and priorities with the evolving data landscape will be critical to the utility agenda of driving smart transformation.
Read the WNS DecisionPointTM report, Smart Enablers for the Utility Industry, for details on the need to institutionalize analytics and build a data-empowered ecosystem.
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24 January 2022
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