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Technology can help utilities care for customers and combat COVID-19


May 7, 2020

Before COVID-19, utilities did an excellent job fulfilling the expectations of users: providing safe, affordable, and reliable power, gas and water. Decarbonization was accelerating and renewables gaining traction. Businesses and consumers were demanding better services at a lower cost.

Responding to this demand, the industry began exploring exponential technologies, creating more intelligent workflows, and starting to selectively leverage business and market platforms. For example, electrical utilities were looking ahead to meet new challenges, like:

  • Reducing cost-to-serve by 10 to 20 percent
  • Maintaining grid performance while new and more distributed energy resources are connected to the grid, prosumers (those who both consume and produce energy) emerge, and the penetration of more intermittent renewable energy increases everywhere
  • Mitigating increasing cyber-risks.

The COVID-19 situation

Then the pandemic struck. Today, we are isolated, yet connected. We videoconference with colleagues all day. We do the same with friends and family in the evening. We want to hear good news. We need to feel safe. We worry for those around us who put their lives at risk for the well-being of others.

And all along, utilities have delivered. The industry was prepared. Electricity and water continue to flow. Gas heats myriad homes. But all is not well. Operationally, the industry might be in excellent shape, but moving forward, it will face unprecedented economic challenges.

Electricity demand is declining between 10 and 30 percent, because the commercial and industrial sectors are at a standstill. Simultaneously, the residential segment—each of us—is consuming more. The decrease in demand is met by a drop in oil and gas prices, driving electricity market prices in some parts of Europe to USD 20 per megawatt hour (MWh).

The industry’s COVID-19 response

Amid this crisis, utilities are working tirelessly to fulfill the world’s expectations: to provide safe, affordable and reliable power, gas, and water to their customers, despite COVID-19-related challenges. In the next 30 to 60 days, they will be attending to the following critical activities: 

Addressing escalating cybersecurity threats: A skeleton staff of critical resources likely remains on-site, practicing social distancing, but much of the workforce and supply chain is now remote, putting traditional security controls to the test. This means utilities must work smarter to handle increasing cybersecurity demands, protect critical infrastructures and build out utilities' security, resiliency and continuity plans (see our industry study). Adaptability and innovation of security and risk practices are imperative.

Maintaining resilient contact centers: COVID-19 is driving high call volumes to contact centers in all industries, including utilities. Customers may have questions about service requests, power outages and, most importantly, bill payment concerns.

Many utilities are also struggling with call center work-from-home options and have limited capabilities to serve customers through digital channels. Using a chatbot, such as Watson™ Assistant, can drive automation of many customer inquiries. With a cloud-based, self-service customer engagement platform, utilities can manage call volume while enabling customer service agents to work from home.

Assisting utility customers with financial hardship: Many customers must balance who and how much they can pay in the wake of COVID-19-induced financial hardship. Necessities like water, gas, and electricity services are going unpaid just when people need them most. Utilities are inundated with customer calls and requests for assistance.

AI and advanced analytics can identify customers at risk of missing payment, enabling utilities to proactively roll out programs to communicate with these customers about bills. Utilities can then quickly and efficiently deliver financial assistance to those most in need.

Minimizing outage risks and optimizing workforce resources: We must keep our lights on and our hospitals running, so utilities must continue to perform the mission-critical work of responding to outages and emergencies—all while sizable portions of their field crew may be sick or under quarantine. 

It is possible to delay maintenance and prioritize tasks that can be performed by a lone worker, but in large outage scenarios, deferred restoration is not an option. This can be mitigated by monitoring incoming weather, analyzing the risk of vegetation contact with conductors, estimating the health of an asset to withstand the upcoming storm type, and predicting the damage it will cause. Utilities can mobilize the right staffing levels at the right times and optimize the use of their limited resources.

The post-COVID-19 world

As we move out of the pandemic, energy suppliers will experience real tension on revenue cycles, cash management, and brand perception. Regulators are likely to increase network efficiency and performance targets, and pressure will continue to mount on non-competitive types of generation.

Despite a difficult economic context, the global call to decarbonize will continue; deviations from decarbonization or NetZero emissions targets will be unacceptable.

The way forward into this new world is for utilities to continue on the road to transformation they were traveling prior to COVID-19. That means:

  • Integrating more renewable energy by using more distributed and granular sources of flexibility (such as batteries).
  • Using artificial intelligence (AI) in the relationships with customers, improving service levels, and reducing cost-to-serve.
  • Combining multiple technologies to optimize the performance of assets, from turbines to transformers.
  • Re-architecting information technology to enable faster change, incorporate new combinations of information and actors, and increase asset observability.
  • Evolving cybersecurity frameworks to be strong and impenetrable.

Nevertheless, they must be cognizant of the new economic, social and political context. If cost-to-serve has to be reduced by 40 percent, instead of 20 percent, if the network total expense has to be reduced further, while expanding the grid's capabilities, the industry must consider how to make it possible.

For the short run, utilities will have to quickly and thoroughly analyze their cash flow projections and ROIs, and in an even more open and collaborative model, find optimization models that are quick to implement. 

More companies will find themselves considering extended industry business platforms, outsourcing non-core activities, pursuing functional automation with embedded AI, and establishing long-term strategic partnerships to deal with a radically changed field of play.

Longer term, the environmental impacts observed during the pandemic will likely lead regulators to support accelerated change. Some utilities will harness technology to introduce new business models and process platforms with greater speed. Simultaneously, utilities will have the opportunity to ask regulators to support the cloud, AI, blockchain, and other advanced technologies to sustain the favorable environmental changes we’ve seen.

It’s a lot. So, utilities should embrace innovation with partners outside their traditional value chain. 

For their part, governments and regulators need to set clear rules and stable frameworks that allow new innovative business models, and all players must find a common way forward: accelerated­—and radical—innovation. That innovation will be powered by cloud-based platforms, new data, AI, and a more powerful partnership among consumers, businesses and governments.

To support our clients, IBM has developed best practices and recommendations for actions to take now and after the pandemic. Click here to access our COVID-19 Action Guide and related resources.
 


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Meet the author

Ricardo Klatovsky

Ricardo Klatovsky
Global Sales and Engagement Vice President, Environment, Energy, and Utilities (EE&U) industry, IBM


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