The Internet of Things: connecting the (utility) dots

When you walk down a lane in Barcelona, you are being watched – by the street lights. They sense your presence and track your progress, adjusting the level of light in front of you and behind. When passing they dim the lights to save power and money.

The utility industry is reeling from an assault of new technologies with disruptive impacts on long established business models that have not seen this pace of change since the days of the very first power grids.

Multiple forces are in play.

The costs of infrastructure technology – such as computer, storage and networking – are continually declining. As a consequence, it has become practicable today to gather, store and analyse vast quantities of data that would have been impossible to justify just a few years ago.

The internet has reached almost every building, every person and every device on the planet. We are now witnessing the internet’s tentacles extend into every machine, every object, and indeed every ‘thing’ on earth that we try to communicate with.

Welcome the Internet of Things (IoT): thousands of devices which talk to each other in responsive and intuitive ways.

The world is being covered in sensors. These minute devices can measure temperature, pressure, flow, motion, chemicals, noise, smoke, smells, location, position…in fact just about anything imaginable today can be detected through some form of sensor. This Internet of Things will be the basis of huge amounts of new innovations, forcing organisations in all manner of industry sectors to adjust rapidly or face obsolescence.

Analytics, combined with new ways to store, process and search huge pools of data can help move organisations from information systems mostly devoted to reporting the past, to revealing important information happening right now. This move in the focus of IT from hindsight to insight is now being extended to foresight – the power to predict likely future events, customer intentions and important market shifts using predictive analytics.

Today, it is possible to determine critical patterns by analysing data from entirely different sources. Real value in today’s utility industry can be found through information asymmetry – joining the information dots in fresh ways from new sources and types of data that provide unique insights and foresights unmatched by competitors.

One example of the power of connecting the information dots for power utility firms is enhanced customer insight. This could include fraud detection, current diversion, enhanced customer billing, demand forecasting and personalised pricing. And the use of social media (like sentiment analysis) enables new levels of customer insight reducing the amount of customer support traffic.

In terms of technology disruption, the power utility sector is facing some of the biggest challenges of any industry. No less than five different types of technology are intersecting and undergoing rapid rates of innovation at the same time:

  • Information Technology; Cloud computing, Analytics, Internet of Things; Big Data
  • Operational Technology; Smart Grid, embedded systems, process equipment
  • Energy Technology; Solar, wind, fuel cells, energy storage, distributed energy generation
  • Automotive Technology; Driverless cars, hybrid or hydrogen fuel cell cars
  • Consumer Technology; Smart appliances, smart meters, data feeds to personal mobile devices

The convergence of all these technologies has the potential for a devastating impact on the power utility industry. In the near future households may be generating much of the energy they need themselves (3), including plugging their car into their house (4) with high levels of visibility on power use and demand (1), with less consumption (5) and improved automated distribution networks (2).

Leading utilities firms across the world are proactively preparing for these digital disruptions. One of the first and most powerful ways they are doing this is to maximise their decision making by tapping into the world of data now available, inside and outside of their business.

Only by having information asymmetry and connecting all the available dots of data can a modern utility business successfully navigate a way forward through this period of intense change.


3 thoughts on “The Internet of Things: connecting the (utility) dots

  1. editor@newsroom

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    From Bob Haywood: As I re-read the piece, I agree, somehow the information asymmetry idea was not that clear. It is quite simple – the contention that competition will increasingly be a battle fought using information – the business with the most information wins – a form of asymmetric warfare.

  2. Eleonora Bettenzoli

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    it’s not that clear how you use the “information asymmetry” expression here. Clear and nice piece all the same, picturing clearly the scenario.

  3. Grant Wardell-Johnson

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    Important piece. Many thanks. Being in my 50s, I often find the world fast. But not in some of the technologies mentioned. The maths is such that often the pay-back period can be short. There are, I suspect, complex questions of who pays and who benefits. But when I sit impatiently at a red light with no traffic facing the green, I think as a society we are often more than a little slow. Grant W-J.

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