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The Internet of Things has expanded dramatically as more smart devices are deployed worldwide.
FREMONT, CA: Utility firms are under increasing pressure to adopt and exploit new technologies to survive and thrive in the face of industry-wide challenges and disruptions. Technological breakthroughs, shifting customer needs, and the advent of the "prosumer" are radically altering the Utility scene; therefore, Utility companies must adapt to thrive.
The expansion of the Internet of Things (IoT)—is one of the greatest potentials for the sector's modernization. IoT can be conceptualized as a vast, interconnected network of internet-connected devices that automate, gather, and share data. The IoT allows utility businesses to develop better, more effective ways of resource management.
The impetus for the Utility industry to embrace an IoT-centered strategy has been primarily driven by the increasing complexity of consumer wants, desires, and capabilities. The proliferation of distributed energy resources (DER) and the emergence of the "prosumer," a customer who also produces energy through renewable power, are prime examples.
More and more people have begun to invest in their energy-producing resources, such as wind turbines and solar panels, due to the growing dependability and accessibility of small-scale, renewable energy generation.
These distributed energy resources enable consumers to generate electricity and trade surplus power on the NEM. However, this presents Utility firms with several challenges.
First, the increase in distributed energy resources has complicated managing energy distribution grids. Second, if the prosumer trend continues, energy providers' potential market is projected to decline as customers assume greater responsibility for their energy consumption. Despite these obstacles, the Utility sector has adapted slowly.
According to a report by Gartner, the vast quantity of spatially distributed and complex assets and processes involved in energy distribution, which is only growing more complicated as distributed energy resources (DER) proliferate, offers fertile ground for the IoT to thrive. These assets and processes have prompted the development of remote monitoring and control technologies, such as IoT platforms for vertical applications.
The IoT has expanded dramatically as more smart devices are deployed worldwide. In 2018, more than 22 billion devices were connected to the IoT globally, projected to reach 50 billion by 2030.
The data capabilities made possible by IoT will be crucial for Utility firms to adapt to the industry's future. This is already evident in the market, where startups founded on IoT and other new technologies can surpass larger, more established competitors who still rely on traditional IT and infrastructure.
IoT-provided data can enable utility companies to improve operational efficiency on a massive scale, regulating demand and monitoring distribution significantly more effectively than they could in the past. The rapid growth of distributed energy resources (DER) and prosumers will also make IoT an indispensable tool for keeping up with an increasingly complicated energy system.
As consumer behavior and needs evolve, IoT technology will enable utility firms to provide consumers with different billing methods and services. The more data businesses collect, the more they know about their customer, and the more they can ultimately give them personalized services or extras. This opens up new sticky revenue sources for businesses and makes consumers less likely to shop around for a better price.
Utility firms will reap enormous benefits from utilizing IoT to enable edge-of-grid data gathering, manage DER contributions to the grid, and remotely monitor distribution assets in near real-time. Implementing IoT across the business can yield an estimated $160 billion in cost savings and efficiency gains for the industry.
This comes with the caveat that investing in the IoT is anticipated to cost $100 billion, a significant initial investment that many Utility firms may find challenging. Innovation and leadership in the utility industry will significantly improve for those who adopt IoT.
Utility firms' IoT benefits primarily arise from a greater capacity to collect and analyze data to manage distribution networks and other assets more effectively. According to research by Deloitte, IoT provides exponential technologies that utilities can implement and utilize to discover new methods to investigate and extract incremental value from the intelligent grid.
Energy-focused Utility firms may be under greater pressure to adopt the IoT due to the proliferation of DER and prosumers, but water Utility businesses also stand to gain. Utility firms can harness the IoT across the water cycle, from sourcing water resources to monitoring distribution systems for leaks to enhancing the efficacy of wastewater treatment.
