Article 5 – How Utility companies can leverage the advancements in the IoT industry for a better tomorrow

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Due to industry-wide challenges and transformations, Utility companies are facing increasing pressures to adapt and leverage new technology to survive and succeed. Technological advancements, changing consumer needs, and the rise of the “prosumer” mean that the Utility landscape is changing drastically, so Utility companies need to change accordingly if they want to prosper.

One of the biggest opportunities for the sector’s modernisation is the growth of the IoT – the Internet of Things. IoT can be conceptualised as a huge, interconnected network of devices linked via the internet – automating, collecting and sharing information. For Utility companies, IoT presents an opportunity to build smarter, more efficient approaches to resource management.

How recent developments have laid the foundations for IoT technology in the Utility industry

The push for adopting an IoT-centred approach in the Utility industry has largely come from the increasing complexity of consumer needs, demands, and capabilities. A key example comes from the growth of distributed energy resources (DER) and the rise of the “prosumer”, a consumer who also produces energy through renewable generation.

Thanks to the increased reliability and accessibility of small-scale, renewable energy generation, more and more consumers have begun to invest in their own energy generation resources such as wind turbines and solar panels.

These distributed energy resources allow consumers to generate their own energy and trade excess power on the NEM. However, this poses problems for Utility companies on multiple fronts.

First, the growth of DER has made energy distribution grids more complex and harder to manage. Second, if the prosumer trend continues, then energy companies are likely to see their potential market rapidly shrink as consumers become more responsible for their own energy needs. Despite these challenges, the Utility sector has been slow to adapt.

According to a report from Gartner, the “large amount of spatially distributed and complex assets and processes” involved in energy distribution, only growing more complex due to increases in DER, is fertile ground for IoT to flourish in. These assets and processes “have necessitated the development of remote monitoring and control technologies, including vertical IoT platforms.”

Why the Utility sector must evolve & adapt to an IoT approach

IoT has grown exponentially as more and more smart devices come into use across the globe. In 2018, over 22 billion devices were hooked up to the IoT worldwide – and this figure is expected to rise to 50 billion by 2030. What does this mean for the Utility industry? In a word: data.

The data capabilities made possible by IoT will be essential for Utility companies to adapt to the future of the industry. This is already being seen in the industry as startups built around IoT and other new technologies manage to out maneuver larger, more established competitors still relying on legacy IT and infrastructure.

The data provided by IoT can enable Utility businesses to enhance operational efficiency on a huge scale, managing demand and monitoring distribution far more effectively than they could previously. The rapid rise of DER and the prosumer also means that IoT will be an essential tool for keeping pace with an ever more complex energy grid.

As consumer behaviour and needs change, IoT technology will also provide Utility companies with the means to provide new billing systems and service types to consumers. Iman Ghodosi, vice president of the subscription management company Zuora, states that there is an “urgent need” for an overhaul of pricing models in the Utility industry, and that the IoT can help lead this change.

“The more data you collect, the more you know about your customer and ultimately, the more you can offer them in terms of personalised services or add-ons,” states Ghodosi.

“From a business perspective, this unlocks new ‘sticky’ revenue streams and means that consumers are less likely to shop around for a better deal.”

How adopting IoT technology can benefit Utility companies

Leveraging IoT to enable edge-of-grid data collection, manage DER contributions to the grid, and monitor distribution assets remotely in near-real-time will offer huge benefits to Utility companies. Implementing IoT across the industry has the potential to deliver an estimated $160 billion of benefits to the industry due to cost savings and efficiency increases.

This does come with the caveat that investing in IoT is estimated to cost $100 billion – a high initial cost that many Utility companies may find hard to swallow. However, those that do make the leap to IoT adoption will be in a far better position to innovate and lead in the Utility industry of the future.

IoT’s benefits to Utility companies largely stem from an increased ability to collect and analyse data in order to monitor distribution networks and other assets more effectively. As a report from Deloitte states: “IoT offers exponential technologies that utilities can deploy and leverage to find new ways to explore and extract incremental value from the intelligent grid.”

Energy-focused Utility businesses may be facing more pressure to adopt the IoT due to DER and prosumer growth, but water Utility companies also stand to benefit. Water management Utility companies can leverage the IoT throughout the water cycle, from sourcing water resources, to monitoring distribution systems for leaks, to increasing the efficiency of wastewater treatments.

Lessons in leveraging IoT from beyond the Utility industry

Utility companies aren’t the only sector that stands to benefit from the Internet of Things. Many other industries have already begun to leverage the IoT for a variety of purposes; and while the Utility sector’s hesitancy to adopt new technology may be holding it back, this caution does allow it to examine results from other industries to see what lessons have already been learned.

For example, take the weather forecasting industry. Amec Foster Wheeler has made powerful use of the IoT to enhance its safety and environmental monitoring for oil and gas companies. By capturing continuous streams of diverse meteorological and oceanographic data in real-time using IoT connected sensors and other devices, the company has seen huge benefits.

These data streams are analysed and fed into logistics planning and asset management, increasing efficiency, improving safety, and substantially lowering risks for their clients.

Shawn Allan, project manager at Amec Foster Wheeler, states: “In the past, information on potentially dangerous atmospheric conditions and threats were difficult to obtain and use for effective forecasting.” However, IoT has changed this.

“This data allows us to craft better forecasts for clients to make critical decisions — like when to shut down drilling, halt helicopter flights or alter a ship’s course,” says Allan.

“With our integrated IoT system, we can now analyze a vast amount of current and past data in real time to allow our clients to make informed decisions that are saving lives and money, and reducing the risk of environmental accidents.”

This provides useful lessons for the Utility industry’s own adoption of IoT tech. Monitoring weather conditions will be vital as the DER trend continues, since many distributed resources such as solar panels and wind turbines are reliant on weather conditions. Effective monitoring of atmospheric conditions alongside real-time data on these resources’ production can allow Utility companies to better manage their distribution grids.

How IoT is leveraged by Utility companies outside Australia

As well as looking at other industries, it can be helpful for Australian Utility companies to examine how the sector has adapted in other national markets. One useful case study is that of GLOBAL OMNIUM/Aguas de Valencia, a water management Utility that serves the water-scarce regions surrounding Valencia in Spain.

Due to the water scarcity in the region, GLOBAL OMNIUM/Aguas de Valencia has a particularly pressing need for data to monitor water supplies and maintain high levels of efficiency within its water supplies. As such, they have been testing a rollout of narrowband-IoT meters and other devices across their service area.

These IoT devices have been deployed in typically hard-to-access areas such as those in underground rooms or beneath metal covers on streets. The IoT allows GLOBAL OMNIUM/Aguas de Valencia to standardise the readings from its connected meters and devices despite working with a number of different meter providers, simplifying its data collection procedures.

The initial deployment of these IoT meters and devices has been a success, with all devices reliably providing 24 readings per day. Each meter has been able to communicate up to 500 messages per day, with only a 0.5% message loss rate even with devices underground that would typically have their transmissions blocked with traditional meters.

This reliable data transmission means that GLOBAL OMNIUM/Aguas de Valencia can reach even higher levels of efficiency across its service area. Furthermore, the standardisation provided by these IoT devices means that they now have the potential to outsource all of its communications and data needs to an external provider.

Valencia’s IoT Utility trials provide a blueprint for success for Australia’s Utility companies. They show how greater connectivity, data gathering capacity, and monitoring capabilities can lead to much more effective resource management and a better service for customers, as well as opening the door to new operational models where data needs can be easily outsourced.

Sigma Connected: A vital partner for utility companies adopting IoT technology

The internet of things is all about connectivity – not just to the devices connected to the IoT, but also to the consumers and prosumers involved in this network. As such, Utility companies looking to leverage the IoT to grow and succeed must also be prepared to enhance their customer contact solutions.

Enter Sigma Connected – an award-winning white-label contact and service centre solutions provider. With Sigma at your side, your business will have all the tools it needs to enhance its connectivity and make full use of the opportunities the IoT provides.

Sigma’s key capabilities

Sigma Connected provides end-to-end customer contact solutions that cover every stage of the customer journey, from sales, to outreach, to retention. We tailor our solutions to your exact needs, providing bespoke services focused on your specific challenges and goals.

As well as enhancing connectivity, we understand the need to leverage data to improve efficiency and deliver better results. That’s why we developed our unique Value-Add Engine, which enhances data collection and analysis in order to constantly seek new opportunities to implement ongoing improvements to your business processes.

On top of technical solutions, Sigma also provides training to sales and customer service teams to enhance their capabilities. By bringing industry-leading knowledge and skills to your teams, Sigma Connected can dramatically improve performance in key areas such as customer acquisition, retention, and satisfaction.

How Sigma Connected can help the utility sector make full use of IoT technology

The growth of the IoT within the Utility industry is intimately linked with the increasing adoption of distributed energy resources and the resulting rise of prosumers. This will result in fundamental changes to the dynamics between Utility companies and their customers; as such, it’s imperative that Utility companies have the tools to provide effective customer service.

The Internet of Things will bring a wealth of new data about your customers and their needs. It’s therefore essential to have a partner who can leverage all of this data effectively to create better customer experiences. Sigma Connected can do exactly that – we can analyse your data to provide deep insights into the customer experience and help your business to implement vital improvements.

As well as providing outsourced solutions to handle the new communication and data analysis needs introduced by the IoT, Sigma Connected can provide industry-leading training to your internal teams to help them make the best use of IoT technologies and capabilities. Our expert training will enable your business to leverage IoT technology to its full potential.

By making use of Sigma Connected’s bespoke solutions, your business can ensure it maintains healthy relationships with its customers and delivers unbeatable customer service. Our outsourced solutions give Utility Companies the flexibility and agility they need to adapt to the changes that the IoT is set to make to the industry.

Conclusion: Leveraging the IoT represents a bright future for the Utility industry

The increasing complexity of energy distribution grids thanks to DER and the rise of the prosumer mean that the IoT will be an essential component in the Utility industry’s future approaches to resource management. Australia’s Utility companies must seize the initiative to adapt and innovate using IoT technology if they wish to succeed in the Utility industry of the future.

For those that do successfully leverage the IoT, numerous benefits await. Alongside greater operational efficiency and more effective resource monitoring, the IoT opens the way for exciting new services and business models that represent a bright future for the Utility industry.


For further information or a wider discussion on how we can help your business, contact us below.

About the author

Jason Cowan is Sigma Connected’s Regional Managing Director, Australia.

You can contact Jason via email or connect with him on LinkedIn.