Top 5 Challenges

3/28/2019 Five Challenges Facing the Utilities Industry in 2018| EASi.
com
Jan 17, 2018
F i v e C h a l l e n g e s Fa c i n g
the Utilities Industry in
2018
Home (/en) Insights (/en/insights)
Ian Rives (/en/about-us/experts/ian-
rives)
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3/28/2019 Five Challenges Facing the Utilities Industry in 2018| EASi.com
Change is constant in the utilities industry,
and 2018 is no exception. How can
companies navigate the complex factors at
play while continuing to create value for
their stakeholders?
A er several decades of industry-wide change from a
variety of external and internal forces, utilities now
face a new wave of powerful disruption from
progressing technology and shareholder performance
expectations. At the same time, converging pressures
such as grid modernization, an aging workforce,
growing client demand for a ordable, reliable and
environmentally sustainable electricity, governmental
regulation and IT/OT integration are bringing
immense challenges that companies must solve
through e ective lean operations, all while driving
utilities to strategically maneuver and create value for
their stakeholders.
Governmental policy and regulation
One thing is certain when it comes to regulation, there
is no certainty. Even if lawmakers roll back regulations,
companies must run e ective and e cient businesses
as part of risk and compliance analysis so they are able
to meet the expectations of any applicable legislation.
Utilities must continue on the path of nding new
ways to generate power with plants reaching their end
of life. In order to do this, updating the infrastructure
will remain a critical need from 2018 and beyond.
Updating grid infrastructure
Modernizing the U.S. power grid to make it smarter
and more resilient is one of the largest undertakings in
utility history. The Grid Modernization Multi-Year
Program Plan (MYPP
(https://energy.gov/eere/buildings/downloads/mult
year-program-plan)) developed by the U.S.
Department of Energy (DOE) seeks to increase the
grid’s reliability and resilience.
For utilities, a modernized grid means improved
security, reduced peak loads, increased integration of
renewables and lower operational costs. The goal is to
use technologies, equipment and controls that
communicate and work together to deliver electricity
more reliably and e ciently. Consumers will also
bene t from the reduction in the frequency and
duration of power outages, reduced impact from
storms and having service restored more quickly when
outages occur. In addition, with easy access to their
usage data, consumers can better manage their own
energy consumption and costs.
In 2018, expect to see consumers calling the shots. It’s
predicted by 2023 that the “smart home” market will
reach $138 billion and smart meters will be a big part
of this; meanwhile the market is starting to see
increased competition from Amazon Alexa, Google
and others. This should serve as a wake-up call for
utilities to be agile, exible and operationally sound.
Utilities will want to stick to what is core to their
business and look for partners that can guide them
through this potential threat and make a competitive
advantage.
Aging workforce
The most signi cant challenge facing the industry
today is an aging workforce coupled with a decline in
available talent. According to the Department of
Labor, as much as 50 percent
(https://www.doleta.gov/brg/indprof/energy_pro le
of the nation’s utility workforce will retire in the next
ve to 10 years. Many utilities require additional
support to work on new capital projects, and those
projects are increasingly complex. This need is
particularly acute with engineering and design, where
the talent supply is greatly diminished and most high-
tech companies have done a good job of recruiting
and developing top STEM talent. According to a 2015
survey
(https://energy.gov/sites/prod/ les/2016/03/f30/U
Energy and Employment Report.pdf) by the U.S.
Department of Energy, 72 percent of energy
employers report having di culty nding talent. We
expect this gap to only increase over time in 2018.
Integrating renewable energy sources
With global markets in Asian and European countries
leading the charge, another goal of the MYPP is
increasing supply-side opportunities that incentivize
customers to participate in electricity markets. Many
utilities are recommitting to the customer relationship,
achieving retail revenue growth by providing popular
commodities like solar energy and battery storage to
the consumer. In the UK for example, energy providers
are looking to adapt “pay as you go” business models
through transparent billing and exible payment
options, putting customer service at the forefront.
In the U.S., reliable integration of renewable and
distributed resources is of great interest, according to
60 percent of utility respondents in Utility Dive’s 2017
State of the Electric Utility survey
(https://s3.amazonaws.com/dive_assets/rlpsys/SEU_
In the same survey from prior-year 2016, 94 percent
indicated they saw a compelling reason to invest in
renewable energy.
IT/OT integration, AI and IoT
A 2016 white paper from Accenture notes
(https://www.accenture.com/us-en/insight-it-ot-
integration-future-utility-distribution)that “driving
e ective IT/OT integration will be critical to enable
data and operations to seamlessly work together to
achieve business outcomes and greater future
performance." While utilities are making tremendous
progress, by adding advanced sensors and devices to
their networks that drive smart grids and help them
align with the growing imperatives of renewables,
they are also beginning to realize that IT will
substantially multiply returns on OT investments.
According to IT company Wipro
(https://www.wipro.com/documents/Energy-
Utilities-Powering-the-Next-Wave-of-IT-OT-
Integration.pdf), IT/OT integration o ers the critical
ability to ensure predictive maintenance through OT
readings and IT updates so that:
E ciency is improved
Downtime is reduced
Costs are lowered
Risk to assets is minimized
Customer satisfaction is increased
Gartner predicts that “by 2022, more than 80 percent
of enterprise IoT projects will have an AI component,
up from less than 10 percent today.” Consider a
country that relies heavily on importing oil, and then
consider the impacts of an advanced monitoring
system that could monitor and control the spillover of
energy. The dependency on imported oil would go
down, meanwhile energy e ciency, cost savings and
customer satisfaction would go up.
Utility companies are addressing industry headwinds
by extending technical and managerial capacity with
the right people, processes and technologies to
address many strategic initiatives through valued
partnerships. Complicating this charge is the aging
workforce
(https://www.easi.com/en/insights/articles/looking-
for-a-few-thousand-good-engineers) coupled with a
decline in available talent that is being absorbed by
high tech companies. Further, aging infrastructure
vital to the grid has reached the end of its lifespan.
These three trends are creating a perfect storm that
utility leadership must navigate successfully. To
supplement their internal expertise, extend their
capabilities and stay ahead of market needs, utilities
o en turn to service providers for needed support and
industry knowledge.
So, what should utilities look for in a service
provider?
As a baseline, the highest quality service provider
should be able to demonstrate expertise in these ve
areas:
1. Safety, security, and risk mitigation
2. Flexibility/scalability to adapt to radical change
and help innovate
3. Ability to automate routine/standardized
processes
4. Strategic maneuvering through business
initiatives
5. Strong network of subcontracting partnerships
Ability to ensure safety, security and risk
mitigation planning
It’s crucial to create a plan that identi es risks and
issues as early as possible in the project so resolution
or mitigation options can be executed to reduce the
potential for changes. Your service provider should
also be experienced at analyzing project risk factors to
ensure a safe environment, safeguard from cyber
threats and reduce risks. This plan should also include
a supplier’s Health & Safety program, one that aligns
with the client’s vision and safety culture, as well as a
security breach action plan that aligns with most
current NERC-CIP Standards.
Flexible engineering programs and solutions
With overhead expenses impacting earnings,
companies are continuously seeking ways to decrease
expenses and improve e ciencies. To support
capitalized e orts, they will o en turn to strategic
partners who can o er alternative, exible methods of
delivering projects. Ideally, ones with expertise in
solving business problems to deliver technical
solutions (https://www.easi.com/en/insights/case-
studies/automation-and- rmware-support-boosts-
smart-meter-grid-
testinghttps:/www.easi.com/en/insights/case-
studies/automation-and- rmware-support-boosts-
smart-meter-grid-testing) and strategic initiatives, and
who are capable of implementing IT integration that
utilizes diverse, multi-industry best practices.
Utilities need solutions to new business problems
while also keeping up with a high volume of capital
projects that align with their internal quality and
design standards. Look for a strategic partner to
provide creative solutions to help develop new
standards for an evolving grid. In turn, focus can be
placed on critical projects and operational initiatives
that align with implementing your business strategies.
Ability to automate routine/standardized
processes
As the volume of capital projects increases, it is critical
for utilities to optimize, standardize and automate
their project execution process by maximizing
e ciencies.
The ability to automate these processes through multi-
industry best practices, document, and operationalize
allows for better visibility into capital initiatives. By
automating project workload through technology and
utilizing historical data, utilities can keep up, stay
ahead and better serve its customer base by
determining how Arti cial Intelligence and IoT can be
an opportunity before it’s a threat through this
technological revolution.
Strategic maneuvering through business
initiatives
By working with a consultative services partner,
utilities can address shi ing business needs while
continuing to complete current projects on-time. The
right partner will provide business solutions that
address emerging challenges, operational gaps and
business requirements.
From as-needed consulting services to multi-year
programs, utilities may need an array of speci c
project related engineering and technical services that
optimize project scope, schedule and cost. They can
bene t from access to an experienced sta of
professionals with diverse backgrounds in the electric
utility industry.
As always, communication is key. Look for a project
team to track all deliverables with metric evaluations
of safety, cost, quality and schedule, and work
together to develop applicable and customized key
performance indicators (KPIs) for reporting and
communicating throughout the project. Look for
partners who are willing to invest near you with “brick
and mortar ” engineering operations. This provides a
high level of collaboration, customer service and the
communication needed for successful project
execution, while ensuring a long standing
relationship, eliminating unnecessary overhead and
driving maximum quality through continuous
improvement.
Channel subcontracting partnerships and social
responsibility
An engineering partner will look to have strong
subcontracting partnerships in the industry to ensure
coverage for the entire project lifecycle, maximize
outputs, control costs and execute on high-quality
deliverables. These partnerships are set up to meet
critical needs, as well as develop core social
responsibility and economic e orts for local
economies by mentoring Diverse Business Enterprises
(DBE) to develop and complement core capabilities.
At EASi, we specialize in these and many other areas
that allow utility companies to successfully compete in
this complex modern landscape. In addition to
extensive in-house engineering expertise, EASi o ers
customized value solutions to produce results that
help address the current operational, political and
economic landscape while designing and maintaining
an ever-evolving power grid. To learn more about how
EASi can help your business, contact
(https://www.easi.com/en/contact-us?
icid=ot_easi_n_gen_xx_nnrtcls-
rtk_xx_xx_xx_20180103_1c9b622b) us now.
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3/28/2019 Five Challenges Facing the Utilities Industry in 2018| EASi.

Jan 17, 2018

the Utilities Industry in

Home (/en) Insights (/en/insights)

Ian Rives (/en/about-us/experts/ian-

Change is constant in the utilities industry,

and 2018 is no exception. How can

companies navigate the complex factors at

play while continuing to create value for

A er several decades of industry-wide change from a

variety of external and internal forces, utilities now

face a new wave of powerful disruption from

progressing technology and shareholder performance

expectations. At the same time, converging pressures

such as grid modernization, an aging workforce,

growing client demand for a ordable, reliable and

environmentally sustainable electricity, governmental

regulation and IT/OT integration are bringing

immense challenges that companies must solve

through e ective lean operations, all while driving

utilities to strategically maneuver and create value for

Governmental policy and regulation

One thing is certain when it comes to regulation, there

is no certainty. Even if lawmakers roll back regulations,

companies must run e ective and e cient businesses

as part of risk and compliance analysis so they are able

to meet the expectations of any applicable legislation.

Utilities must continue on the path of nding new

ways to generate power with plants reaching their end

of life. In order to do this, updating the infrastructure

will remain a critical need from 2018 and beyond.

Updating grid infrastructure

Modernizing the U.S. power grid to make it smarter

and more resilient is one of the largest undertakings in

utility history. The Grid Modernization Multi-Year

Program Plan (MYPP

year-program-plan)) developed by the U.S.

Department of Energy (DOE) seeks to increase the

grid’s reliability and resilience.

For utilities, a modernized grid means improved

security, reduced peak loads, increased integration of

renewables and lower operational costs. The goal is to

use technologies, equipment and controls that

communicate and work together to deliver electricity

more reliably and e ciently. Consumers will also

bene t from the reduction in the frequency and

duration of power outages, reduced impact from

storms and having service restored more quickly when

outages occur. In addition, with easy access to their

usage data, consumers can better manage their own

energy consumption and costs.

In 2018, expect to see consumers calling the shots. It’s

predicted by 2023 that the “smart home” market will

reach $138 billion and smart meters will be a big part

of this; meanwhile the market is starting to see

increased competition from Amazon Alexa, Google

and others. This should serve as a wake-up call for

utilities to be agile, exible and operationally sound.

Utilities will want to stick to what is core to their

business and look for partners that can guide them

through this potential threat and make a competitive

The most signi cant challenge facing the industry

today is an aging workforce coupled with a decline in