Utilities face a whirlwind of change, including shifting regulations and evolving consumer demands. But it is energy transition—the ongoing process of replacing fossil fuels with low-carbon sources—that continues to drive the industry, with fully modernized smart grids on the supply side and retailers rapidly digitizing customer touchpoints.
Moreover, the rise in distributed energy resources (DERs)—energy generation units often owned by consumers, such as rooftop solar panels—will fundamentally transform energy markets and utility operations. In some cases, this presents an existential threat to utility companies that fail to keep pace if consumers elect to self-generate electricity and bypass utility companies entirely.
Experimenting with and deploying advanced and emerging technologies can be risky for an industry whose top goal is to keep power on everywhere. But it’s only by keeping up with or staying ahead of this evolving market trend that utilities, regulators and customers can reap the full range of benefits available through a more distributed energy system.
Economist Impact Group research supported by Cognizant identifies the pain points the utilities industry is experiencing in a tumultuous and competitive market. Future-readiness lies in the connection points between the major investments now taking place: renewable and distributed energy sources, digital technology and the customer experience.
It’s vital, then, for the utilities industry to proactively plan and invest in digital systems, an effective workforce and the business processes needed to accommodate a large amount of new distributed energy resources. This shift brings new challenges to the traditional pace and approach of the sector.
Within the industry, leaders have begun to develop new skillsets and disciplines across their companies. Installing leaders from other industries to modernize workspaces is one indicator of the subtle cultural change taking hold.
Leaders are also looking to create future success by harnessing data to make informed decisions, capturing and leveraging institutional knowledge, adopting business model innovation, and investing in the employee experience—in some cases looking to monetize data where feasible.
Proven tech tops the digital shopping list
Respondents were asked to identify the technologies and methodologies their business has adopted or is planning to adopt in the next two years. (Percent of respondents who have adopted or plan to adopt)