The Internet of Things can be leveraged by utilities to develop ongoing, meaningful relationships with customers through devices, software and services, says Navigant.An executive summary of a new report by Navigant Research, titled "Utility Technology Disruption Report", explains that the Internet of Things can help utilities transition into new ongoing advisory and managed services relationships.
Navigant’s principal research analyst Casey Talon said: “This new approach to customer engagement will direct behavior modification, load control, and conservation in concert to maximize reliability and resiliency of the grid."
The report states that utilities have focused on traditional demand-side management programme engagement with residential and commercial customers, incentivising investment in specific technologies or behavior changes.
[quote] Navigant suggests that taking advantage of two-way communicating devices, data analytics, and services, IoT can help utilities to gain greater insight into customer loads and improve customer satisfaction.
The findings are based on an examination of US IoT customer adoption trends, changing technology and the vendor landscape and utility rollouts out to 2025.
Pilot-scale utility IoT
The Colorado-based research firm estimates that 70,000 customers will be in pilot-scale utility IoT engagements across the US by 2020. This represents a US$50 million market.
Further to this, IoT in the US has the potential to attract 1.6 million customers, representing a US$500 million market in 2020.
Navigant attributes the following drivers to the expected growth to cost containment, demand for customer choice, and improved synergies with existing DSM programmes.
"IoT enables customers to manage their energy independent from their utility and will require a rethinking of current utility business models to capture market share in this broader demand management landscape," concludes the report summary.
Tech news site ReadWrite, states that utilities are facing a challenge in that they are under increasing pressure to integrate new forms of energy, while utility costs remain higher. Adding to this, utilities have to balance lowering energy demand caused by energy efficiency efforts and enabling technologies.
Peter Terium, chief executive officer at RWE, described this transition as “the worst structural crisis in the history of energy supply.”