Customer Driven –The New Face of Electric Utility
Just like any other industry, the customer is the raison d’être of the electric utility industry. Electricity is a basic need and the potential customer base of a utility company is limited only by the total population of the region they serve. In the last few years, these customers have become more vocal and demanding which is leading the companies to make changes to their operational and business models.
Customer expectations and demands have affected electric utilities in a number of different ways. These include –
- Demand for cleaner energy – The impact on the earth of using fossil fuels is immense and people have become very conscious about their own part in it leading to demands for the use of renewable sources such as wind and solar.
- Dynamic Pricing – The demand for electricity is not constant throughout the day and this is leading to calls for dynamic pricing. In such a case, peak and non-peak hours are defined and the price changes as per the demands in those periods.
- Distributed Grids – As per expert forecasts, electricity generated by rooftop solar panels will become cheaper than electric grids by 2020. In such a scenario, electricity utilities will have to evolve with proper utilization of existing electricity resources and implementation of affordable energy storage technologies as distributed grids will become predominant.
All these consumer demands mean a higher capital requirement for electric utilities which can lead to increased pressures on already thin margins. A material MDM solution can help in such a case as it can drive costs down by eliminating duplicate orders, reducing inventory holding costs, minimizing breakdowns, and improving operational efficiency.
In the last three weeks, we have entered the rapidly changing world of electricity producers and distributors to know the reasons for this change. Now that we are aware of how technology, customers, and regulations are impacting the industry, the question becomes – how to manage this impact? This is exactly what we’ll talk about in our fourth and final instalment of this blog series.
Further Reading –
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