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The Kodak moment

Photo 153256818 © Anil Dave - Dreamstime

There comes a time in every industry, lifecycle and business where a paradigm shift needs to occur.

For businesses that have huge investments in their infrastructure, that are often by their nature conservative - such as electric utilities; Paradigm Shifts take a large amount of courage, thought, leadership and risk in order to get it right and invest ahead of the curve.

On the flip side here are many tombstones of companies that have failed to embrace these shifts and adapt their business to a technology or paradigm shift in how their businesses are run.

Kodak, Blockbuster, Sears, and Smith Corona are all examples of this, to name a few. All fascinating case studies with different lessons learned that we can learn from.

However, that time is here for the utility industry - Our Kodak moment

Blockchain is one of many technologies set to disrupt the energy industry. With demand side management, renewable energy growth, data hungry customers, distributed generation and a younger tech savvy workforce - Utilities needs to adapt, change and embrace the blockchain.

How might the blockchain be used in the utility industry:

  • Imagine a system that allows electrons to be tracked via the blockchain. If you are a consumer and you pay a premium for renewable energy from your regions latest wind farm. Are you really consuming the premium energy that you paid for?

Of course not, but what if we could stamp each electron with a blockchain identifier and start to control where the electrons go over the transmission network and ultimately where they end up?

  • If I am a bulk customer and I want to track energy usage through my operation. How about comparing specific energy components of my operations across the country?  The blockchain provides a potentially unique monitoring system in an extremely cost-effective manner, allowing a method to monitor and track.

What if utilities could start to provide this valuable insight into customers businesses, using our electrons and the blockchain. This opens new revenue generating ideas of a subscription-based model and more value for our customers

It is impetrative as a utility industry, even more so as an investor owned utility, that Executives start to dream about the possibilities and head down a path of developing these ideas. If not, our stakeholders, investors, customers and younger employees will start looking elsewhere. The stale unadaptable companies will become obsolete and your organization will of course be experiencing a ‘Kodak moment’.

How might we as an industry get our heads around this challenge and opportunity:

  • Industry driven research and development. As an industry we need to set the parameters of technology development but not be afraid to step outside the box of our traditional comfort zone. Partnerships with research industries, industry networks and think tanks are key but this needs to be market driven as it is not about just about publishing academic papers in a journal. It is developing real world solutions in order to survive.
  • Collaboration. The utility industry globally has a great track record of collaboration. This is a key strength that we have. As a group of similar minded people all in the same situation we can compare, learn and adapt from each other. Look past the Continent, utility companies in Europe, Asia and the South Pacific are all doing some incredible things. We are all in the same boat, we can learn form each other.
  • Engage our younger colleagues. There are many smart ‘kids’ in your organizations. They don’t come to the table with 20 years of preconceptions, they wonder about why we don’t do things that are obvious to them. Sure, some of the ideas may be laughable and impractical but they are the future, so help them shape their future.
  • Embrace our conservatism as an industry. There are many good reasons why we are conservative by nature as individuals and companies, but conservative and risk adverse doesn’t mean stuffy and unwilling to change.

As the bitcoin craze dies down and the blockchain concept becomes more mainstream our colleagues in the financial services and health care industries are all ahead of the curve, it is now time for utility executives to embrace, change and adapt to avoid their own Kodak moment.

Graham Carter's picture

Thank Graham for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Sep 20, 2019 9:14 pm GMT

Thanks for sharing this word of warning, Graham. Perhaps it's because I spend a lot of time on Energy Central where these type of digital solutions are talked about a lot, but are there a lot of utilities at risk of not adopting blockchain into their operations as it matures? And if so, what are the arguments they are using for not jumping aboard? 

Graham Carter's picture
Graham Carter on Sep 20, 2019 9:42 pm GMT

I think there is a lot of discussion about these types of technologies but not necessarily a reciprocal  amount of action by each of the companies.

In my experience the same thing has/is happening with the ageing workforce challenge.  A lot of utilities talked about it but there are lots that haven’t really implemented programs to address the issue.

In terms of arguments for not jumping aboard I think often its they have core mission critical things to deal with or execs don’t understand the technology so don’t focus on it.

A lot of utilities are still battling ageing infrastructure issues, operating challenges that utilities have been experiencing over the last 15 years and some of them haven’t got there yet. 

Matt Chester's picture
Matt Chester on Sep 23, 2019 12:50 pm GMT

That's great perspective-- being aware of an issue and acting on it are two very different things, and divided attention/resources is indeed a problem of those who are too short sighted. Hopefully action starts to come to the degree it's needed

Bob Meinetz's picture
Bob Meinetz on Sep 20, 2019 10:16 pm GMT

Graham, where are these "data hungry customers" I hear about? Personally, I don't know anyone who enjoys analyzing their electricity bill - they'd rather not think about it.

Maybe some customers are forced to analyze their electricity bill because they need to make every penny count. But I think you'll find they won't appreciate blockchain, paradigm shifts, or thinking out of the box nearly as much as cheaper, more reliable electricity- electricity they don't have to think about.

Graham Carter's picture
Graham Carter on Sep 21, 2019 12:20 am GMT

For sure you’re right about reliable power if you don’t have that then it’s a no brainer. Mostly in North America we have that.

However once you have that I believe consumers especially Millennial’s are asking for more and more data.  look at the evolution of the Nest and Google,Apple, Amazon  home management systems. The true smart house controlled online is not that far away and the next logical thing will be monitoring how much power the device is used.  

Most utility customer websites are horrible you can barely login and get your bill let alone have any meaningful information for you to consume or make smart decisions about. 

A real example is saving energy by turning pool pumps on and off. In Los Angeles how many home have pool pumps on 100% of the time that don’t need them. 

Bob Meinetz's picture
Bob Meinetz on Sep 21, 2019 3:05 pm GMT

Good points. I can certainly relate to lousy utility websites and service. On the other hand -

Working in Big Data myself, I've learned (the hard way) there is a trade-off between convenience and security. For example: I would bet most millennials who appreciate the added convenience and control of online home management systems have never read those systems' privacy policies (who would?). The people who create those systems are even more hungry for data than they are - about not only their users' preferences, but what else is in their homes, their schedules, even their political leanings and personal relationships.

So, count me out. Many have already reached the point where any convenience these devices/systems offer is offset by inconveniences, identity theft (and worse) which have nothing to do with managing their homes. Again, from personal experience: welcoming Google and Amazon into my home is not the 'next big thing' for my family, and never will be.

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