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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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Implications of the data explosion for utilities

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At the recent SAP for Utilities event in San Antonio, I caught up with Martin Mysyk, Senior Architect for TransAlta and we discussed the implications for utilities of the massive data explosion that is occurring in their industry right now.

Here is a transcription of our conversation:

Tom Raftery: Hi everyone! Welcome to GreenMonk TV. I?m at the SAP for Utilities event in San Antonio, Texas, and with me I have Martin Mysyk, who is the Enterprise Architect for TransAlta.

Martin, we?ve been talking about the amount of data utility companies you?re going to be dealing with and the mountain? I heard a talk earlier this year in Orlando, where one of the utility companies was talking about the change in meter reads from 75 million a year to 120 billion.

Now, there is also the other side away from smart meters and into just the devices on the grid itself and the amount of information they will be sending back to utility companies, what are they going to do with all this information and how are they going to handle it?

Martin Mysyk: Well, I think we do have to look at new ways of handling that amount of data, how we?re going to store it, how we?re going to back it up. And we?re monitoring so many more data points as we move from an analog world to a digital world. There?s an acceleration of the amount of data points where some of our assets may have had a couple of thousand data points we?re monitoring, taking in.

Some of our newer instrumentation generates 20,000 data points that we can monitor. So, that?s a large amount of — big influx of data that we have to — you want to keep it real time and that takes new techniques, new technology that we have to look at to be able to keep that on track and to be able to extract the information out that we need.

Tom Raftery: Okay, but 20,000 data points, is that too much? I mean, how can utility companies make any sense of that amount of data?

Martin Mysyk: That?s where you need another level of intelligence to layer on top of what you?re retrieving out of there, because you really — you can?t read that from a human perspective, you need software that looks for exceptions or things that are out of range to deal with those because whenever things are operating properly you don?t care about it. It?s just when there are exceptions or something?s going to impact your production capability that you want to know about that.

Tom Raftery: At the backend you?re going to need bigger servers, you?re going to need bigger failover facilities and all that?

Martin Mysyk: Yes, and the network ties it all together. So, wherever that is stored only high-speed networks have a lot of band with to carry the data, whether its onsite or everyone talks about being in the cloud. If you put it in the cloud, you are going to need lots of pipes to get it there.

Tom Raftery: This sounds like a lot of investment for utility companies, is it worth it?

Martin Mysyk: I think so, because we have to be aggressive on how we manage our data and our decision making capability needs to accelerate, because when we move into a more comparative global marketplace you have to have that decision making power and to do that you need the — to make information out of your data and that is only going to accelerate as time goes on.

Tom Raftery: Cool. Great. Martin, thanks a million.

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Big emphasis on mobility at the SAP for Utilities conference

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SAP for Utilities

I attended the SAP for Utilities conference in San Antonio last week. I gave the closing keynote (which I’ll write-up in another post).

I was interested though by the fact that two themes recurred in all the opening keynotes.
1. All of the opening keynoters made mention of Social Media – this was a huge relief because my closing talk was due to be on Social Media, so the speakers were setting the stage nicely! And
2. Mobility was talked up big-time by the speakers

I had expected some talk of mobility, along with HANA, Smart Grids Cloud and Analytics – the usual gamut of topics at these events and they were indeed all addressed, but there was a definite emphasis on mobility over all other topics.

It is understandable – with the advent of tablets and smartphones, computing is going mobile, no question about it. I think it was Cisco’s CTO Paul De Martini who dropped the stat that 200,000 new android devices are being activated daily.

This impacts utility companies on two fronts:
1. On the customer front, utilities can now drop the idea of in-home energy management devices and, instead, assume the vast majority of their customers has access to a smartphone or tablet and
2. On the employee front, utilities have lots of mobile workers – the ability to connect them easily back into corporate applications will be game changing.

In my talk on social media strategies for utilities – I suggested that utilities equip every truck-roll with a smartphone. That way, when they get to site to repair a downed line (or whatever), they can take a quick video of the damage, the people working on-site, and in the voice-over give a rough estimated time of recovery. This can be uploaded to YouTube at the touch of a button on the phone and so, call center operators, and social media departments can direct enquiries to the video – immediately helping diffuse the frustration of having power cut.

Programs like this can even be pro-active and the customer service benefits of rolling this out should not be under-estimated.

Utilities are entering a new, more challenging era. Mobility solutions (especially when combined with social media) will be a powerful tool to help them meet these challenges.

Full disclosure – SAP is a GreenMonk client and paid travel and expenses for me to attend the conference.

Photo credit Tom Raftery

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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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Smart Grid management software

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One of the key challenges for any new technology, like Smart Grids, is finding intelligent ways to manage them.

Smart Grids contain new assets for utilities (Smart Meters) which collect data about energy usage and pass it back to the utility. They should also be capable of receiving data from the utility (price signals) and communicating that with the household.

Because this is an extremely immature technology as yet, there are many new entrants in the field with solutions around managing Smart Grids.

At the SAP for Utilities conference, I spoke to Krishna Kumar of Space-Time-Insight and he demonstrated their Smart Grid management software. I was impressed at the way the software used Google Maps and was able to zoom in or out to report at the city/block/individual residence level!

The fact that it also allows for the management of assets like wind turbines makes this an interesting piece of software for utilities, I suspect.