The energy transition currently underway in Europe provides a unique opportunity for utilities to prosper from the development of new business models. In this post, we’ll consider the view of Thierry Godart, Schneider Electric Utility Segment President.
“European utilities should view the transition as a type of rebirth. It’s a chance for them to understand their customers’ needs better and provide additional services,” explains Godart.
He explains that the industry has been rapidly changing and many European utilities were caught off-guard by the rising popularity of feed-in tariffs. The lower cost of renewable energy installation has been a real game changer in the industry.
Schneider Electric has worked closely with utilities for many years and supports those that embrace this transition. “Smart utilities are what we call them—they are the ones preparing for decarbonisation and renewable energy development. We have had to change our strategies to accommodate the new business models.”
Godart notes that Schneider Electric constantly improves its solutions and services so that utilities can implement new strategies and systems.
“We are seeing a shift from CAPEX to OPEX. The sector is making use of existing assets and optimizing the need for automation and intelligence. IT is being used increasingly to help utilities manage the business of the grid better, for instance, Advanced Distribution Management System and data management systems. Utilities must be surgical about what they are going to change in order to recover their investments.”
For example, grid operators need to be proactive about embracing distributed energy resources. That’s because the integration of energy must still be regulated by the system operator in order to prevent grid instability and overload, but also to make the most of their infrastructure. Godart recommends that utilities use data collected from the connection of distributed energy resources to promote their case. “Data should be clearly communicated to these customers so that there is a better understanding of how the energy is integrated.”
Additionally, utilities can use data management to provide better service to their customers while also being compensated for this data assimilation and analytics.
Godart says that utilities have become much smarter about controlling customer’s energy consumption. Further, by adopting open-standard technology with a single gateway that’s under utilities’ control, they can better manage customer usage without negatively affecting customer comfort. Advanced demand management and response can also maintain grid stability without harming customer comfort.
This energy transition isn’t easy for utilities to deal with. As they change their technology and business systems to remain competitive, skill gaps are a major problem. And in addition to being consumers, customers now play a substantial role in energy production. Consumer engagement has therefore become a higher priority, and new strategies and regulations must be developed.
Utilities face strong pressure to reduce operating costs while at the same time upgrading the grid and developing their systems. Godart says that utilities must plan to reduce costs via modern optimisation. “This cost-saving will go towards value-added services that will help to maintain the grid. This is key as it will free up utility staff, as well as much-needed finances.”
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