Why The Utility Industry Should Embrace Energy Efficiency
The electric power and utility industry is experiencing a period of transformation due to disruptions to the market. As innovation increases, consumer demand changes, and regulatory pressure heightens, utilities face challenges. They now must fill a demand gap between energy consumption and innovations in efficiency technologies. Customers are demanding power-sector technology at a rate that has surpassed most utilities. Without consideration for this demand gap, utilities risk falling behind advancing competitors in the industry. As consumer demand for energy efficiency increases and electricity usage decreases due to technological advances, how will utilities keep up and maintain growth?
The simple answer to this is utility investment in efficiency measures. Through technological advancements and data analytics, customers will be able to reduce their consumption leading to cost savings. Utilities customers are becoming incentivized to pursue energy efficiency measures for their businesses. They believe these changes will give them a competitive advantage, boost their bottom line, and promote their environmental and sustainability goals. Many customers trust their utilities to implement efficiency measures, even if they have not yet. This gives utilities a limited window to establish a new business model implementing innovative technology. However, for many utilities, they lack the in-house skills and funding to develop data driven energy management solutions.
So how do utilities evolve?
What presents itself is a market opportunity for capitalization, which calls for a change in the traditional business model for utilities. Historically, utilities focused on supplying cost-effective, reliable electricity (still a priority). However, utilities now must evolve, marketing their new energy- and cost-saving services to consumers and help integrate distributed resources to a grid originally designed for central generation and distribution. Although some utilities have developed simple models for bill reduction and energy management, they often lack the software capabilities to execute and deliver their services to their large customer bases. Though advances in technology have created disruptions in the market for utilities, they also generate opportunities. Many utility industry leaders have turned their focus to how these technologies can complement their existing services by creating customer value through reliability and reduced costs.
To save cost and time, utilities can create partnerships with energy management software companies. This solidifies market expertise and cuts the hassle of developing energy-related software services internally. Utilities can then leverage their market presence and offer the desired services to their customers. Investment in efficiency technology rewards the utility with a competitive advantage and closes the demand gap, while keeping customers satisfied with energy savings.
To learn more about how you can reduce consumption and demand, measure & verify efficiency projects, and implement procurement strategies to maximize ROI, contact us or schedule a demo of our Watchwire utility data management platform.
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