Digitizing electric utilities

The energy landscape is evolving. Consumers and businesses are demanding more sustainable energy options and transformative initiatives. Simultaneously, electric utilities are looking for new approaches to improve grid performance and prepare for a cleaner, distributed energy future.

But globally, power utility maturity is unequal at best. Availability of natural resources, such as sun and wind, and access to capital exacerbate inequities. And in a post-COVID world, a shifting—or nonexistent—“normal” may exert unique pressures on energy company operations.

To help guide short- and longer-term strategies, the IBM Institute for Business Value (IBV) identified a group of electric power generation, transmission, and distribution utilities that perform better than their peers in core reliability, resilience, and profitability metrics. And, they’re moving steadily toward a more sustainable energy future.

We call these leading organizations “Core Performers,” and they demonstrate that the basics of energy management remain as important as ever, even in the face of constant disruption. Our analysis of Core Performers provides a roadmap for building the utility of tomorrow through logical, extensible investments today.

What differentiates these companies, aside from superior performance, is the way they prioritize the integration of new technologies into their existing infrastructures and operations. Since reliability, resilience, and efficiency are their current priorities, they defer new capital investments in grid assets by optimizing existing equipment. Additionally, Core Performers recognize that grid and infrastructure skills are critical to their future success, so they’re focusing on upskilling existing employees on emerging technologies.

The benefits of digitization

Core Performers offer a model for building the sustainable utility of the future. Their goal is to intelligently integrate, organize, and manage sources of renewable energy generation—which requires them to quickly assess and respond to real-time grid conditions. The motivation to increase transmission reliability is threefold: ease congestion, allow for increases in demand, and provide a greater degree of security.

That's why Core Performers are beginning to digitize their assets. They are combining Internet of Things (IoT)-connected sensors with communications and analytic technologies to gain faster, more accurate insights—insights that can be used in developing strategies to prolong asset life. Almost one-third of Core Performers have implemented tools that can analyze data generated by sensors and actuators, along with real-time events and asset health indicators from SCADA/EMS, for predictive maintenance and quality.

On average, more than a third of Core Performers have instrumented and connected equipment in plants and grids. Equipment-mounted sensors collect operational data that, when analyzed, allows utilities to monitor performance, optimize maintenance schedules, and better understand performance shortfalls in real time. And a third of Core Performers use location management solutions that, when coupled with advanced analytics and AI, help them automate maintenance and support processes and improve visitor and workforce safety.

A smarter, modern electric grid can lower consumer cost, contribute to a more efficient economy, facilitate rapid growth in renewable energy sources, and enhance overall energy reliability. And these benefits are within reach. Forward-looking utilities can build a strong foundation for the future by focusing on four essential enablers: workload-adaptive cloud, analytics-ready data integrations, cyber resilience, and workforce reskilling.