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Utilities and change – times are changing

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I attended this year’s International SAP for Utilities event in Berlin and despite it’s being co-located with the SAP Oil and Gas conference which led to some unfortunate references in the keynotes, it was an interesting event.

Some of the numbers I learned at the event were that of SAP’s 5,800 utility customers, 65 are on HANA, and the first Suite on HANA customer (Snohomish County Public Utility District) will go live in September.

SAP also let it be known that it has 2 utilities customers who are on their new S4 platform. One is a net new customer, while the other is migrating so as to be a “Utility of the Future”.

Apart from that I had conversations with several SAP Utilities customers, and I was surprised at how utilities, who have traditionally been averse to change (65 out of 5,800 have moved to HANA), are starting to realise that technological change is inevitable, and so are starting to embrace it. Albeit slowly.

I spoke to Khalid Al Dossary from Saudi Electricity Company (see video above) and he told me of two projects they’ve recently rolled out. The first was a move to paper invoicing because they want to move completely away from paper. And the second, even more interesting was the rollout of SuccessFactors, for talent management (HR).

Why is this interesting? Well, SuccessFactors is cloud delivered and utilities have been seen as being cloud averse. I remember having conversations with utilities executives who said they’d never move to cloud only two years ago. It’s funny how time moves on.

I also spoke to Hydro Tasmania’s Rick Quarmby (see below) who talked about two projects Hydro Tasmania rolled out recently. One using OpenText for document management, and the other was a workforce productivity app (which you can see the employees rave about here).

I also recall, in the mid to late nineties, having conversations with people who said their business’ didn’t need to have a website. Or that they would rollout email and Internet access within the company, but only to certain employees who might need it.

Thankfully those days are long gone, and now it is unusual for organisations not to have a website, or to block internet access for their employees.

In a similar vein, with the increasing pace of technological change, I fully expect the vast majority of utilities to have moved fully to the cloud ten years from now, and any who haven’t will be viewed as laggards.

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Mobile, the utility industries and beyond

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SmartPhone

It is hard to over-state the huge advances mobile devices have brought to companies in the last two years. We’ve featured a few examples here on GreenMonk in the past.

I was at the SAP for Utilities event in Copenhagen last week to moderate a panel and while there I happened to sit in on Rory Shaffer‘s talk on how mobile is impacting utility organisations, and it has been equally transformative there too!

Rory tells stories of how mobile apps and devices are helping the field work force reduce safety incidents, improve work quality, and shorten work cycles. For managers and executives, it allows them to see at their fingertips how their assets are performing, check customer trends and financial and regulatory exposure. Customers are also seeing new leaps forward in how they interact with their utilities thanks to mobile. Texas company CenterPoint Energy have a Mobile Outage Tracker app, for example available on both the Android and iOS platforms.

We are seeing a rise in the number of utilities with mobile portals for customers, faster resolution of issues thanks to mobile, and utilities starting to respond to their customers on the customers’ channels of choice (often Twitter or Facebook on customers’ mobile devices).

Rory cited some impressive outcomes from the rollout of mobile solutions by Pacific Gas and Electric. Their field worker productivity rose by 47% after the deployment because the new mobile solutions reduced their paper based workflow from twelve steps to five. Other advantages encountered included an increase in the average number of monthly work orders per employee from 43 to 87, substation inspection time reduced 80% from 2.5 hours to 20 minutes and reduced data entry time by an average 30 minutes per day.

Reductions in the number of steps by substituting with mobile also yields advantages like fewer data input errors, reduced paper use, and increased transparency across the organisation.

Most of these advantages achieved from the rollout of mobile applications are not unique to the utility industry, but are applicable to most industries across the board (particularly those with field service staff, it has to be said). The story of how mobile is changing enterprise is just starting out and if the efficiency gains of the last 24 months are any indication, we are in for exciting times ahead.

Image credit Tom Raftery

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Utilities need to offer innovative energy services or risk being sidelined

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Elderly man

The EU has mandated a rollout of smart meters to at least 80% of households by 2020. What are some of the transformative ways we will we use the extra energy consumption information these meters will bring?

Last November I wrote a blog post about new energy services and business models for utilities which the granular energy consumption smart meters measure will enable. In the post I noted that

according to the US Census Bureau:

The world’s 65-and-older population is projected to triple by midcentury, from 516 million in 2009 to 1.53 billion in 2050.

Further, there are currently 30 million solo-single households in the United States (more than the number of households containing married couples with children) and about one-third of these solo singles are men and women 65 years of age and older. The percentage is even higher in Europe.

Now, if I have an elderly relative living alone, wouldn’t it be a very useful service if I could receive a timely message from their utility company if there are deviations from the normal patterns of energy usage (if the lights aren’t turned off at 11pm or the coffee machine/kettle isn’t powered up at 8am)?

I have been positing this idea of using exceptions to normal energy use as triggers for alerts, especially for family members interested in the care of an elderly relative for quite some time. Every time I mentioned it though, I always received technical reasons why it wasn’t feasible. Until very recently that is.

A few weeks back I attended the SAP for Utilities event in Madrid. There I had a meeting with Axel Memminger where we were talking about SAP’s in-memory database HANA. Because HANA runs in-memory, it allows for very fast querying of massive datasets. This is fantastic for seeing trends in historic data but not for examining realtime info.

During our talk, Axel happened to mention that as part of the Sybase acquisition SAP now had picked up a realtime event processing engine called Event Insight. Event Insight was built to parse massive amounts of data looking for exceptions and triggering alerts in realtime.

It immediately occurred to me that this was the missing piece needed to allow utilities rollout enhanced energy services like the monitoring of elderly relatives I outlined above. When I explained this idea to Axel his eyes lit up and he started architecting the solution in his head as we discussed it.

“Would you be willing to pay for something like this?” he asked me at one point. “If this were offered for something like €5 a month, I’d pay it in a heartbeat” I replied. And I strongly suspect I’m far from unique in this.

With utility companies facing reduced incomes from energy sales, it is only by providing imaginative energy services like this that utilities will secure their long-term viability.

Nor will they be alone in plying for this business. I can see services like this being offered by telcos as well and even more likely, it is a natural extension of services from care companies who typically already offer remote monitoring.

Unless utilities are innovative in the energy services they develop and offer, they may find themselves sidelined in their core-market. Who’d have predicted 10 years ago that Apple Computers would be the dominant player in music sales?

Photo Credit Tom Raftery

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Deeply embedding social media and gamification into utility companies

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Energy 2.0 at Visualizar11

View more presentations from Tom Raftery

I was asked by the MediaLab Prado to give an updated version of my Energy 2.0 talk at their Visualizar11 – Understanding Infrastructures event in Madrid during the week.

I took the opportunity to update the deck with some of the thoughts I presented at the International SAP for Utilities event around deeply embedding social media into utility companies.

At the Visualizar11 event I talked about how utility companies will need to use gamification and competitions to pique customers’ interest in energy savings and to keep their engagement levels high. Even more importantly, done well, this will greatly extend the Mean Time to Kitchen Drawer (MTKD – the time it takes for people to get bored with an app and metaphorically stuff it in the kitchen drawer).

I was delighted then yesterday when IBM tipped me off that they are collaborating with three US utilities (CenterPoint, Oncor and San Diego Gas & Electric (SDG&E)) to launch the Biggest Energy Saver contest to help people better understand smart meter data.

In fact, there are two Biggest Energy Saver contests – one for customers to encourage them to reduce their energy consumption with a grand prize of an electric vehicle or a first-prize of a suite of GE smart home appliances in the Oncor and CenterPoint Energy service territories.

The second competition is for software developers to develop apps to help customers understand and use the information from their smart meters – this competition has potential prizes totalling up to $150,000. Serious money!

All of the details of the competitions have yet to be announced – but to really knock it out of the park, the customer competition should have social media and gamification throughout – using FourSquare-like principles of awarding badges for people who attain certain target reductions, having leaderboards, the ability to share your exploits on your social network(s) of choice, etc.

I’m giving the closing plenary keynote at the SAP for Utilities event in San Antonio this coming September where I’ll be going into these topics in a lot more detail so expect more on this here in the coming months.

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The International SAP for Utilities event – focus on renewables and in-memory computing

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Joschka Fischer

I attended the International SAP for Utilities event in Mannheim recently. This was the fourth SAP for Utilities event I have attended and it was by far the best. This was the first time I was attending the event as a speaker, not just an analyst and that may well have coloured my opinion of the event, but I don’t think so, to be honest. Why?

Well, there were two main take-aways for me from the event

  1. There was a much higher focus on renewables and
  2. There was a lot of discussion of in-memory computing

And neither of those had anything to do with the topic of my own talk (The New Power of the Customer’s Voice).

I knew I was in for an interesting conference when the opening keynote was from Joschka Fischer. Fischer used his keynote to make a blistering attack on the nuclear industry. Fischer, the former German vice-chancellor and Foreign Minister said “we must say goodbye to nuclear energy – it is not safe, and we don’t know the costs”. He went on to state that Germany “is going to phase out of nuclear energy”. Bear in mind that many of the utilities who were in the room would have significant nuclear plants in their generation fleet.

What will Germany use to replace its nuclear power? Renewables and energy efficiency will be key, he said. Germany will need super grids and a smart grid with gas as a backup technology (from diverse regions because, he said, Russia is not a reliable source).

In his opening keynote, Klaus Heimann, apart from talking up two new SAP Energy Management products, declared that “more than ever before we wish we could generate all of our electricity from renewables” and he went on to assert that “if we spent our resources learning how to capture and store natural power, we’d be in a very different place now”.

And this was the first two talks of the conference!

SAP Research director Orestis Terzidis

SAP Research director Orestis Terzidis

Scarcely a talk went by without some reference to renewables – understandable given that this was taking place in the immediate aftermath of the Fukashima nuclear disaster.

The most data-rich talk on renewables, perhaps not surprisingly, came from Orestis Terzidis, VP SAP Research EMEA. He referenced peer-reviewed research throughout his presentation to make his case that large-scale wind, water and solar systems can reliably supply all of the world’s energy needs at reasonable cost.

Interestingly, on the renewables front SAP has put its money where its mouth is. From SAP’s independently verified Sustainability Report you can see that SAP increased its purchase of renewable energy from 16% in 2009 to 48% in 2010.

Nice – obviously 100% would be better than the current 48% but renewables are not available for purchase in all geographies. Yet.

The other core topic heavily referenced in the event was in-memory computing (In-memory computing moves data off traditional storage and into RAM, providing a performance boost over reading data off disks).

Given that utility companies deploying smart grids will be moving from a maximum of one meter read per month to a situation where they will have more data coming from smart meters (more data fields) and coming in more often (one read every 15 minutes means around 2,880 reads per month), utilities are about to face in influx of data like they have never seen before.

In-memory computing is a natural fit for performing any kind of real-time analytics on this tidal-wave of data. Not surprising then that one of SAP’s first in-memory products is going to be a Smart Meter Analytics for Utilities solution.

The next SAP for Utilities event will be the US one this coming September in San Antonio. Given that this one was so good – the pressure is really on conference organisers The Eventful Group to try to exceed, or even just to match this conference.

Full Disclosure – SAP are a GreenMonk client and SAP paid for me to attend and speak at the SAP for Utilities event.

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Photo credit Tom Raftery

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SAP announces two new energy management products

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I attended the International SAP for Utilities event in Mannheim recently and was surprised when in his opening keynote, Klaus Heimann introduced two new SAP energy management products.

The first is a customer portal for Utility companies which helps utility companies roll out online self-service sites for their customers. This is being made available for utility companies both as a product, and as a service!

And the second is an Enterprise Energy Management application. This is a product to help large organisations better manage their energy – and as Klaus explains in the video above, by energy, SAP is referring to all forms of energy, not just electricity. And water too. SAP hopes to sell this to utility companies, so they can offer it as a service to their larger customers.

I was intrigued by the announcements so I asked Klaus if he’d go on camera to say a few words about them. See the resulting video above and the transcription below…

Tom Raftery: Hi everyone, welcome to GreenMonk TV. We are here at the SAP for Utilities event in Mannheim and with me I have Klaus Heimann. Klaus you brought up in your keynote two new announcements from SAP, two very interesting announcements, can you tell me a bit more about them?

Klaus Heimann: Yes, for sure. The first one was about customer online services. That’s easily explained. 750 million households are currently receiving bills from their utilities that are actually produced by our software. And many of these consumers now are in a deregulated market increasingly getting into the smart grid. And so the number of contacts they have to the utility is increasing and the utilities are getting very concerned about the cost of their call centers, they want to switch to internet. And our offering is here that we want to develop internet self services made-to-order for each utility as they want it, that refers back to the SAP for utilities instance that our customers are running.

Tom Raftery: So this means that the utility companies have an internet portal for their customers?

Klaus Heimann: Yes. The interesting thing is actually we can run that portal for them. And now that’s a longer story, but it’s really a not only an IT product, it’s also an IT service that SAP is thinking about to really help reducing the cost of our customers and make their consumer, customer service more attractive. The second announcement I made is about enterprise energy management. It’s not really a utilities application, it’s actually across industry application that helps big enterprises, number one to save energy, so save kilowatt hours, number two to better give —

Tom Raftery: You were explaining to me earlier this — when are saying energy, you mean, you actually mean energy, you are not talking just electricity.

Klaus Heimann: I mean energy in any kind, actually I also mean water. So primarily I mean energy like electricity and gas, it could also be oil, it could be petrol, it could be water. So we are looking to everything, but clearly the biggest savings are in the area of electricity and gas, that’s why we focus on it. And as I said it’s a cross-industry solution that helps our big enterprises to save energy and also to do a better procurement, a better planning for energy demand and we are presenting this here at this conference, because we do believe this could become a service that our utilities customers use themselves to help their big customers to improve their energy efficiency, because if the utilities don’t do it then somebody else does it, and I think it’s an attractive business especially for retail utilities.

Tom Raftery: Fantastic. Klaus that’s been great, thanks a million.

Klaus Heimann: Thank you.

Disclosure – SAP are a GreenMonk client. They paid for me to attend, produce videos from and speak at the International SAP for Utilities event.

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Utilities developing more of a customer focus

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SAP for Utilities

I attended the SAP for Utilities conference earlier this week in Huntington Beach and I have to say I am impressed by the progress American utility companies are making towards being more customer centric!

The event was titled Sustainability for the New Energy Era and there was a full track dedicated to Smart Grids (obviously I attended almost all of the talks in this stream).

Attendance at the event was surprisingly strong with around 800 delegates despite the current economic woes.

This is the third SAP for Utilities event I have attended and I have to say I was very pleasantly surprised at this event by the number of times customer needs were referenced. Almost all of the Smart Grid talks mentioned the need to involve consumers in the process. Obviously, this is a point I have been banging on about for some time, but it is fantastic to see that the utilities are starting to finally get the message.

One of the best presentations of the event came from Paul Lau of the Sacramento Municipal Utility District (SMUD). SMUD is very unusual amongst utilities in its fanatical focus on its customers – from its About page:

For each of the last eight years, SMUD has received the highest customer satisfaction ratings of any utility in the state in the J.D. Power and Associates survey. SMUD received the second-highest score in the nation for commercial customer satisfaction in 2010.

One reason for this is that Sacramento Municipal Utility District is a community owned electric utility governed by a seven-member elected Board of Directors. SMUD are far from being unique in this model. During Paul’s talk he highlighted other reasons why SMUD is so popular amongst its customers.

SMUD take customer feedback very seriously – in fact, they solicit it. SMUD holds regular focus groups of their customers to find ways they can improve their offerings.

Also, the Board of directors goes out and holds meetings in the community to educate customers about the need for smart grids and consequently they don’t incur any of the blowback which plagued PG&E’s efforts in this area.

Paul commenced his address by paraphrasing Bill Clinton and saying that utilities need to realise that “it is the customer, stupid!” Now, coming from a utility co., that is refreshing!

Lastly, SMUD uses the term customers, not consumers or worse, ratepayers, as many utilities do. Just that slight shift in the lexicon says a lot about how SMUD prioritises its clientbase.

Utilities could learn a lot from SMUD’s focus on the customer – the good thing is that judging from the conversations I had at the SAP for Utilities event, the tide does appear to be turning in that direction.

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GreenMonk interviews Stefan Engelhardt about SAP’s vision for Smart Grids

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One of the more interesting keynote talks at the recent SAP for Utilities conference in San Antonio TX was the one given by Stefan Engelhardt, SAP’s Head of Industry Business Unit Utilities.

In his keynote he discussed decarbonisation and SAP’s vision around Smart Grids and Smart Meters. I asked him if he’d be willing to come on camera to talk about some of these topics and he very graciously agreed.

With the vast majority of the world’s utilities using SAP’s software, they have their fingers firmly on the pulse of this sector. What was pleasantly surprising to me was the amount of interest SAP is seeing from their utility client companies in Smart Grids. As Stefan himself said in the interview:

For the next couple of years we see a clear trend towards the deployment of Smart Metering technology in the Utilities industry… and that means we have to adapt the existing business processes to this new technology

It was also fascinating to hear Stefan’s predictions around how Smart Grids will be rolled out gradually by utilities. Polling of smart meters by utilities will be ramped up bit-by-bit from maybe once a day to once every 10-15 minutes and this will have huge implications for the amount of data utilities will have to manage. Previously they may have collected 1 terabyte every 10 years. With smart meters reporting energy usage every 10-15 minutes they could be collecting 1 terabyte every month, or less!

With the roll-out of Smart Grids, utility companies will be able to publish energy prices in realtime based on supply and demand. This is important because electricity is more plentiful when renewables are contributing to the mix, so cheaper electricity should also track closely with Greener electricity!.

Utilities will now be able to offer new products like critical peak pricing for peak shaving in times of electricity shortage and even demand stimulation, to encourage people to consume electricity when supply is exceeding demand. This will encourage people to shift some of their loads to times when renewables are contributing more, thereby reducing the CO2 emissions associated with that load.

[Disclosure – SAP covered my expenses to attend this conference]

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Smart Grid demo at the SAP for Utilities Conference

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I attended the SAP for Utilities conference last week in San Antonio and was pleasantly surprised to find that many of the Utilities attending were thinking about rolling out Smart Grids or were already running pilot Smart Grids. There were even a couple who were well underway with their Smart Grid rollout project.

Demand Response was being discussed extensively and was cited by most as one of the principal advantages of Smart Grids.

Smart Grids and Demand Response are topics we have covered extensively here on GreenMonk.net and they are core to the Electricity 2.0 talk I gave in Berlin at the Web 2.0 Expo. The importance of Smart Grids and Demand Response cannot be overstated when it comes to energy efficiencies and energy demand management.

SAP are working closely with utilities through the Lighthouse Council, to ensure that whenever a utility wants to go from a traditional grid to a smart grid infrastructure, SAP will have the necessary software pieces in place for them (Enterprise Asset Management, Customer Relationship Management, and the newer Energy Capital Management).

In the video above, Russell Boyer demonstrates a Smart Grid in action. In this use case, Russell acts as the utility call center for a customer who is moving out and wants their power disconnected. The Smart Grid allows the agent to take a meter reading, and shut off power to the meter remotely. This isn’t the best demonstration of the potential of Smart Grids but it was the first time I saw Smart Grid technologies live in action and I have to admit to being wow’d by it.

[Disclosure – SAP covered my expenses for attending this conference]