When I joined the utility industry a year ago, I spent a great deal of time learning the ins and outs of an exciting and highly regulated industry through the lens of a multi-national utility company. In the US, federal and state authorities provide policy and guard rails around everything from safety and security measures to allowable returns for utilities. In the UK, a similar paradigm exists through their unique regulatory bodies. In both regions, regulations are clear and provide rules and guidance for energy companies, utilities and customers/ consumers via various commissions and organizations.
Nothing has changed or challenged the efforts of regulators and utilities more than the evolution of technology. I’m not just referring to the obvious technological advances of energy sources such as solar panels, wind turbines and hydro plants as alternatives to coal, oil and gas; or improved battery and storage capabilities—I’m speaking of the same technologies that have disrupted most other industries and changed the face of financial services: FinTech.
FinTech brought to financial services an unprecedented element of speed and increased accessibility. Everything from payment processing to automated investing services to cryptocurrencies have created more access, transparency and speed for merchants, customers, traders, investors, etc.
This same technology brings unprecedented opportunities to utilities.
Peer-to-Peer trading and Blockchain: As more sources of energy come about, micro-grids are evolving where neighborhoods or small communities can trade energy amongst residents and use blockchain as the immutable record of transactions and a ledger of payments. I sell my excess solar power to my neighbor or we sell to the next community. Transactions such as these were not easily managed and certainly not in real-time prior to payment processing tools.
Omni-channel and mobile payments: Online payment tools on multiple form factors (phones, tablets, PC’s) allow utility transmission and distribution customers to pay bills automatically or instantly. The opportunity to pre-pay for energy or services will also be made possible—similar to buying parking time from a meter through a mobile phone. As a customer scenario, “I have a summer cottage and want to pre-pay for service for the weekend only.” As utilities provide more and more services around the energy they transmit and/or distribute, the more options and choices consumers get. Such services will soon become an expectation instead of an exception.
Big Data, Analytics, and Cloud: Providing recommendations to consumers on when they should charge their electric vehicle based on carbon emissions on a certain day, excess supply of energy, or peak/valley time of day for a given geographic area. Or, even make the best electricity balancing decisions or energy brokering decisions based on a wealth of data available through insights on events, behaviors and weather patterns. And, all this can be done with the elasticity of the cloud through platforms-as-a-service where you pay for your usage only.
As we embrace the rapidly changing landscape of alternative energy sources and the future of battery technology, smart-meters, IoT and edge-computing, the power of FinTech in our industry should not be underestimated. It has and will continue to drive business model, customer engagement model and energy transmission and distribution service changes and opportunities. The technology will help drive improvements in already existing commercial models, and will also enable disruption as it has in other industries.