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How Digital Transformation is impacting the utilities sector

Published: January 17, 2020

Believe it or not, the words ‘utilities’ and ‘cutting edge’ do come up in the same sentence. And, while not in the same light as Silicon Valley legends like Tesla or Apple, utilities are in fact innovative and in the midst of the largest digital transformation the industry has seen. The utilities sector is less worried about moving operations to the cloud and digitizing operations, and more focused on increasing the reliability and survivability of its aging infrastructure. However, as customers expect to interact with their utilities the same way they interact with the aforementioned brands (from their mobile phones, accessing near real time data and with highly customized experiences) the whole industry needs to accelerate its pace of change. 

For power utilities, renewables are becoming more competitive compared to gas- and oil-powered plants, while energy storage costs continue to fall. Smart grid and distributed power generation technologies are driving efficiency, and the growth in electric vehicles will continue to spur new demand. While fossil fuel-powered plants decline in number as utilities prioritize the construction of new wind and solar power plants, these legacy plants will still account for the bulk of the world’s energy supply for the next few decades. As the globe transitions to cleaner sources of power, it’s up to utilities now to increase efficiency, reduce costs and improve safety wherever possible. 

For water and wastewater utilities, smart metering and IoT sensors are being used to detect leaks so that growing communities can reduce water waste and better protect the environment. Increases in desalinization, agriculture water efficiency and water reuse will all be necessary to ensure adequate water supplies for communities facing the threat of permanent droughts and water shortages as a result of climate change, while more extreme storms like mega hurricanes will test the limits of today’s stormwater infrastructure. 

Meanwhile, today’s utility managers are facing challenges their predecessors never had to consider, such as:

  • Infrastructure modernization: Much of the world’s electrical and water infrastructure is decades old and in need of replacement. Not only that, but this legacy infrastructure can be difficult to connect and digitize, making it challenging to use modern technology to drive performance gains.

  • Cybersecurity concerns: Utility networks are being targeted by everyone from mischief makers and terrorists to cybercriminals and foreign states. However, utility IT teams therefore need to work to keep their networks resilient and secure in the face of cyber-attacks they will most certainly face on an ongoing basis. 

  • New business models: Rising costs have utilities exploring shifts from the traditional cost-of-service regulatory model to systems that better reflect market conditions so they can fund trillions of dollars in upgrades and infrastructure replacements in the coming decades.

  • Workforce evolution: Because technology continues to rapidly evolve, utilities need to attract the right skillset to deliver on their future business needs. Today’s workers have many sectors competing for their skills, and it can be challenging for utilities companies to attract the talent they need for the future. 

Not only do utilities need to solve for these challenges, but they have to do so while still delivering the high level of service customers and regulators expect. To expand the capabilities of their current assets while preparing for the infrastructure of tomorrow, utilities are beginning to undergo a full digital transformation that includes changes to technology, processes and culture. The foundation for this digital transformation is a flexible, modern network infrastructure that can be used to drive efficiency and flexibility. Next-generation networking technologies such as SD-WAN, Virtual Network Services and LTE can all help utilities meet their traditional system needs while laying the groundwork for emerging technologies and use cases. 

Meanwhile, Verizon’s managed security services are used to increase grid reliability and resilience in the face of threats from extreme weather, cyberattacks and other catastrophic events. The Verizon Risk Report provides 360-degree visibility of your entire security landscape for enterprise-specific intelligent insights, while Network Threat Monitoring and Managed Security Services help free your IT team to focus on core business goals while keeping up with the latest cybersecurity trends.

Without a doubt, digital transformation will be the most important thing to happen to the world’s utilities since the build-out of the infrastructure itself. While utilities face formidable challenges, they will also enjoy an unprecedented opportunity for greater innovation. This isn’t innovation for innovation’s sake; the world is depending on utilities to modernize their operations so they can meet the needs of an increasingly power-hungry, water-thirsty world in an era where power and water will be harder and harder to come by. 

Come learn more about Verizon’s smart energy and utilities solutions at DistribuTech 2020 Booth #3546.