As energy moves from the centuries-old model of centralised generation and unlimited demand to distributive models and growing requirements to secure supply, it may be time to shift paradigms to big data and smart grids as a way out of the immense pressure currently bearing down the industry.
This is according to Pedro Guerreiro, Head of Sales: Energy & Natural Resources at SAP Africa.
SAP is the market leader in enterprise application software and software-related service revenue. With over 293, 500 customers including large global organisations, governments, educational institutions, SMEs and subsidiaries, the company’s industry-specific applications are driving a business and technology revolution that currently caters to over 50 percent of the world’s enterprises.
In a recent report, Guerreiro disclosed that the utilities sector is in the grips of a shifting reality occasioned by the overwhelming influence of technology which has put old business models under pressure to reinvent or be discarded by new mavericks.
The challenge lies in the fact that energy is not a start-up service business that can shift in weeks or years as it takes decades to effect significant change.
He said: “Energy infrastructure is expensive, colossal and monolithic. Even as alternative sources and decentralised models appear, these are not changes that will happen overnight. In the new reality, data, audit and compliance must go together to secure new revenue for utilities.
“This does not mean the energy sector has time on its side but quite the opposite. Giants turn slowly and, in an environment where every cent matters, that complicates things. Waste is never an option and efficiency is paramount. This does not even touch on the rise of an engaged consumer class that demands certain interactions, all while piling on more personal technology, further straining infrastructure” he added.
Continuing, he said that the numbers back the call for big data and smart grids. Utilities that have adopted smart grid concepts through SAP, on average, reported 61 percent higher returns by reducing breakdowns and improving the effectiveness of their equipment.
Health, environmental and safety audit costs have halved, while billing errors dropped by 28 percent.
According to Guerreira: “SAP has a pedigree that places it at the top of data solutions. The truth is that the energy business is inefficient and stuck in the past. There are many bolts can be tightened and laces strapped down: Leaks, time wasted on processes that could be automated, staff-draining customer disputes. The idea of a one-size-fits-all delivery model is now showing serious shortfalls so, in essence, utilities need to become smart about their business and start running simple.”
He added that utility needs time, planning and careful execution which big data delivers, particularly if combined with the machine-to-machine world of sensors and automation. It is paramount that utilities and their value chain all embrace big data and smart grid concepts.
These will encourage efficiency, enable automation, build protection against uncertainty and create an energy business model that is proactive, engaging and responsive.
Those are the characteristics that the old guard lacked, leaving them open to disruption.