Energy providers around the world are in the middle of an industry transformation. Though the traditional electric supply chain has delivered reliable electricity to consumers for decades, disruption has changed the competitive landscape. New ways to generate, store, deliver, and use energy have entered the marketplace. Technology is a primary cause of the industry disruption. At the same time, it is also the agent for transforming the electric enterprise, achieving business goals, and establishing competitive advantage. Technology-based business strategies can transform utilities, establishing smart grids and generating new business opportunities that increase competitive advantage. Open source information technology solutions can power the capabilities that achieve those strategies.
Utility industry challenges
In the global electric utilities industry, generation, transmission, and distribution are no longer the main links in a mostly linear supply chain. Global climate concerns, market drivers, and technology advancements have changed the picture significantly. Power companies seek ways to integrate renewable energy sources, microgrids, and distributed resources into operations. At the same time, they must focus on ways to lower energy use, boost quality of life, and benefit the environment.
Traditional utility companies are competing with newcomers, including startups, global oil and gas enterprises, and corporations generating their own power. Where they once enjoyed monopolies in their service areas, many of these companies now vie with other providers for customers.
Consumer behavior also impacts the utilities industry. Demand continues for renewable energy sources in power generation. Increasingly, individuals are becoming electric generators themselves through use of solar and wind systems, often selling excess electricity to their primary providers by way of meter hookups. Smart products for the home open opportunities for merchandise sales and service bundles that attract new customers.
Technology-based energy business strategies
Technology is a root cause of—and a solution to—utility market disruption. Power companies cannot rely on legacy systems to remain competitive. Instead, technology leaders must offer Industry 4.0 technologies, embedded in strategies for business growth and competitive advantage.
Put data into the customer experience
Consumers want real-time access to electric consumption data to help them analyze usage patterns and reduce costs. Customer-facing interfaces like online portals and mobile apps offer this data access to residential users. Using data to enhance the customer experience can help increase customer loyalty and grow revenue.
Use analytic tools to optimize consumption and costs
The addition of analytic tools to user interfaces helps residential and business customers and energy providers predict, manage, and optimize energy consumption. Through data capture from sources like process monitoring, automation, and production planning systems, energy companies can make decisions that help optimize energy generation, procurement, and usage.
Establish intelligent power plants
IT and operations technology (OT) still rely on legacy systems and applications in power plants. Today’s technology solutions can take advantage of sophisticated data capture and management that form the foundation of intelligent systems. Edge computing, automation, real-time monitoring, and other capabilities can transform plant operations.
Upgrade transmission line monitoring, maintenance, and workflows
Intelligent systems can substantially increase efficiency and reliability of electric transmission. Automation and real-time monitoring can streamline workflows and increase maintenance effectiveness.
Maintain regulatory compliance
As the electric industry rapidly evolves, so does its regulatory environment. The data capture that improves operations and management also helps to ensure compliance and streamline regulatory documentation processes.
Focus on digital transformation throughout the enterprise
Digital transformation is the strategic way forward for all industries, including the energy sector. Traditional companies with legacy systems may be slower to pursue this transformation than new entrants. However, digital modernization is an imperative for all market players to remain competitive.
Selected use cases
Technology-based business strategies translate to use cases throughout the enterprise. Relevance depends on the type of company and its leadership priorities.
A broad range of open digital leadership use cases apply to the energy industry. Most significantly, a large number of use cases are components of a smart grid that will replace the current generation-transmission-distribution structure that has been in place for decades.
Table 1. Open digital leadership use case detail
Open digital leadership influences
Critical technology capabilities support smart grids, forward-looking customer service, and competitive advantage in the electric industry.
Consolidation of data residing in different formats and transmitted in different ways is a first step to unlocking the power of data in the electric enterprise. A unified dataset is the basis for getting maximum benefit from other technologies.
Artificial intelligence/machine learning
Applying artificial intelligence and machine learning (AI/ML) to captured data generates business insights that can transform all aspects of the enterprise. Data analyzed by AI/ML tools contribute to new insights, informed business decisions, and effective automation of processes and workflows that allow human workers to concentrate on higher-value activities.
Industrial Internet of Things
The Industrial Internet of Things (IIoT) digitally connects IT and OT and facilitates operational improvement, process automation, and digital transformation. Data from IIoT devices can be managed via edge computing. IIoT data analysis by AI/ML contributes to large-scale optimization efforts, innovative services, and an enhanced user experience.
Edge computing takes advantage of the flexibility of hybrid cloud computing to produce faster, more reliable results. Distribution of smaller servers close to data sources can lower network costs, avoid bandwidth constraints, reduce transmission delays and service failures, and better control the movement of sensitive data.
Automation is a top strategic advantage of open digital leadership. In the electric industry, it allows companies to automate repetitive tasks, streamline processes, and increase agility. Automation also allows redeployment of workers to human-specific roles and activities, speeding innovation and focus on new business opportunities.
The open source advantage for utilities
Red Hat is the world’s leading provider of enterprise open source solutions. More than 90% of Fortune 500 companies rely on Red Hat® products and solutions.1 In the utilities sector, Red Hat offers open source technology that supports a smart grid, streamlines operations, and contributes to informed decision making:
- Red Hat’s hybrid cloud architecture incorporates workload portability, orchestration, and management across bare metal, virtual, private, and public cloud environments. The architecture supports an interconnected, consistent computing environment that allows movement of applications between environments without maintaining a complex map of application programming interfaces (APIs).
- Red Hat® OpenShift® and other cloud-native development productslets you accelerate new application builds, optimize existing applications, and connect them all. The platform supports rapid response to market trends and helps turn ideas into products and services.
- Red Hat Ansible® Automation Platform and other automation and management solutions help scale your infrastructure and teams to keep up with capacity demands. With the right automation in place, you can deploy new applications and services faster, manage IT infrastructure more efficiently, and increase productivity in application development. Use automation to streamline provisioning, configuration management, patching, application orchestration, security, and compliance.
To learn more about Red Hat open source solutions for the energy sector and to discuss your company’s specific IT needs, talk to a Red Hatter today.