Electric Companies & MDM: A Solution for the Changes Happening Now
The criticality of electricity cannot be overstated and neither can the effects of the ongoing transformation in the electric utility industry. Worldwide, energy companies are in the midst of mega transitions, forced to rethink how they operate and how they will make good on their obligations over the long term. As the demand for energy continues to increase, these companies will need to alter their old ways — and quickly.
In this series of blog posts, we’ll explore the reasons for such rapid, wholesale changes in the industry and how material master data management can help companies navigate the choppy waters.
To begin, consider the three major phenomena driving changes in the electric utility industry — technological innovations, new regulations, and changing customer expectations. Today, we’ll look at how evolving technology is uprooting norms in this sector.
Technological innovation and electricity generation & distribution have always gone hand in hand, but technological growth has accelerated in recent years, making it a challenge for electric companies to keep up. Two of the most important factors they need to address are:
• Clean energy – The use of renewable energy sources is rising, but they only provide about 14% of the total electricity generation in the United States. Electricity utilities need to be ready to handle the anticipated push for the use of cleaner sources of energy. The global target of reduction in greenhouse gases is steep, and the electric utility industry can (and should) be a driver for it. Such a major shift in the power generation technology will necessitate an overhaul of the components and spares being used, which is where a material MDM solution is required.
• Digital grid – The power grid is slowly becoming digital (over 50 million smart meters deployed in the U.S.)*, making it more controllable and enabling the connection of distributed energy resources as well as devices in our homes and businesses. Faced with the digital revolution, it is imperative that the electricity producers and distributors improve their operational efficiency – something that can be done with the help of a material MDM solution.
In the coming weeks, we’ll pick up right here and see how regulations and customer demands are bringing about changes in the electricity landscape. Later, we’ll also discuss how material MDM can help the electric utility industry become more efficient, solve its pressing problems, and add real dollars to its bottom line.
*IEI Report 2014, Edison Foundation
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