Preparing electric utilities for the energy transition

With wind and solar power now generating over 12% of electricity around the world, the electric power industry has reached a major turning point. Greenhouse gas emissions related to power generation are starting to decline and clean electrification—using electricity generated from renewable energy sources instead of fossil fuels—is building momentum.

Electric utilities must continue to generate more clean energy to reduce carbon emissions by 45% by 2030 and meet the Paris Agreement target. At the same time, the electric power industry is making historically high, multi-trillion-dollar investments to modernize electricity grids, integrate new energy sources, and meet growing global electricity demand.

Assessing the operational capabilities of electric utilities

As electric utilities respond to these challenges, customers, investors, and other stakeholders are asking: How is my utility applying new technologies and innovating to transform operations? Where are they prioritizing efforts to build energy efficiency, sustainability, and resiliency? And how does my utility measure up to peer organizations when it comes to improving capabilities?

The most mature utilities prioritize IT/OT architecture initiatives and 100% of them have organization-wide strategies for innovation and modernization.

To answer these questions, IBM and APQC created the Clean Electrification Maturity Model (CEMM), a comprehensive tool designed for utilities to use to as a roadmap for modernization. Instead of using subjective measures to compare performance against others, utilities can use the CEMM to objectively determine where they are on improving clean electrification capabilities.

As just as importantly, utilities using the CEMM tool can find out where the leading electric utilities with the highest maturity levels are developing specific capabilities in key domains including technology, grid operations, work and asset management, sustainability, strategy and leadership, organization and culture, market innovation, and customer experience.

Mature electric utilities are 5.7 times more likely to use AI and ML to enable optimization of design, forecasting, scheduling, assets, and inventory.

Revealing insights from the CEMM on electric utility maturity levels

In the first global CEMM survey, 90 transmission and distribution (T&D) electric power utilities reported their own levels of maturity in eight business domains. Based on the survey results calculated by the IBM Institute for Business Value (IBV), the CEMM shows that the overall maturity level for T&D utilities is low. But the maturity scores reported by organizations in the top 25% show that some utilities have made demonstrable progress in transforming their operations.

Setting priorities for where electric utilities need to improve

The domains of technology and grid operations were identified as particular areas for capabilities improvement. For example, the CEMM survey shows that 95% of the most mature utilities prioritize the development of distributed energy resources, which helps grids become more resilient and sustainable. Since the maturity gap between more mature and less mature organizations is small in these domains, it points to the need for the entire industry to make faster progress in these key areas, especially as energy consumption grows around the world.

Download the report to learn how the CEMM can help your electric utility company compare the maturity levels of your capabilities to other organizations and provide insights on where modernization efforts translate into leadership on decarbonization and the clean electrification journey.

To gain insight into their plans and progress, electric utilities can now register to participate in the Clean Electrification Maturity Model (CEMM) initiative, an open standard developed by IBM and APQC. This is an opportunity to conduct a maturity assessment of your organization and benchmark your results with industry peers. The assessment evaluates forward-looking digital, sustainable, and market-enabling capabilities of electric utilities.