With the proliferation of smart meters and cheap sensors, energy and utilities companies are looking to technology as a catalyst for business change. Distributed power generation is eroding traditional revenue streams. Plus an aging distribution infrastructure is cutting into profit margins. As a result, utility companies are trying to extract as much value as possible from their smart grid and meter investments to evolve their operations.
How IoT is changing the energy & utility industry
The Internet of Things (IoT) stands to change operations for energy and utilities firms. By combining smart meters with sensors across infrastructure, cognitive computing and analytics at the edge of networks, E&U companies can re-think traditional operating models. For example, Doug Voda of ABB recently discussed productivity improvements using IBM and IoT. And IoT technologies also help utilities to overcome challenges that come with the evolving energy landscape.
Energy and utility providers face fundamental disruptions to their business models, revenue streams and regulatory relationships. Because these changes are historically unparalleled, they also demand uncharacteristic agility on the part of the utilities to survive and thrive through the current transition period. Three converging factors are forcing this disruption:
- The decreasing cost of renewable generation and gas-fueled generation to customers, challenging utility monopolies with the threat of substitution.
- The entrance of third-party aggregators into the distribution market.
- The move by regulators away from traditional ratemaking formulae and toward outcome-based rates. That then provides a fixed rate of return on the asset base to investors.
As a result of improving technologies and emerging regulatory models, industry financials are changing dramatically. This means broad implications across operations, asset management, regulatory, customer and supply chain processes.
Preparing for the future
To successfully contend with industry disruptions, utilities realize that they need analytics. Unfortunately, most have multiple existing analytic point solutions within each domain. These domains include grid operations, maintenance, planning, finance and supply chain. What that means, then is that utilities need is integrated approach that provides a single source of the truth across domains and systems…all to simplify generation of business insights. And they need both out-of-the-box models to accelerate time to value and an open platform to extend solution capabilities to meet individual provider needs.
To address these needs IBM has developed IBM IoT for Energy and Utilities. This open analytics solution meets a wide range of current and future provider needs. Via data integration, analytics, and visualization, it provides a detailed, accurate understanding of historical and current asset and network performance. It also integrates with existing data sources and operational processes. That means you’ll have the ability to analyze and predict asset performance and risk to help deliver safe, reliable, affordable and sustainable energy. Key applications include asset performance management, situational awareness, health and risk, and investment planning. You’ll also find connectivity model verification, and wind farm optimization.
Learn how you can differentiate your company in an increasingly crowded market, or talk to an expert on IBM IoT for Energy and Utilities page.