Trust is the foundation of a healthy relationship. For utilities, pursuing a balanced investment strategy while maintaining trust is paramount.
Historically, customers have trusted utilities to reliably deliver electricity, gas or water consistently, responsibly and cost effectively. Employees have trusted their employers to provide challenging career opportunities and a level of security, and to treat them with dignity and respect. Investors have grown accustomed to utilities as an asset class with a mandate to pursue profitable growth, operate cost effectively, protect the brand and deliver reliable returns on their investments. Regulators have relied on utilities to comply with established regulations and manage their companies in ways that are in the best interest of ratepayers.
However, the rapid pace of disruption occurring in the utility industry brings on new risks that could adversely impact trust with stakeholders
Technology is dramatically changing the landscape for utilities — and the trust stakeholders have in them
Advances in technology are driving many of the dramatic changes that utilities throughout the world are experiencing — changes that can either instill or erode trust.
Electric utilities across the entire value chain are having to respond to the “3D” forces of disruption:
- Decarbonization – toward a cleaner generation mix to meet emission reduction goals
- Digitization – with technology enabling a smarter, digital grid
- Decentralization – empowering customers to produce, store and sell their own distributed, renewable energy
For natural gas utilities, the “electrification of everything” is bringing the low carbon agenda increasingly into focus. As consumers embrace cleaner sources of energy, electricity sourced from renewables and batteries is a rising threat to natural-gas-fueled heating and cooking applications. And for water utilities, digitizing the network offers an opportunity to offset the rising costs of addressing sustainability and quality challenges. However, it also substantially increases the exposure of the water network to a cyber incident.
Utilities are having to embrace a dual strategy that balances the need to continue to invest in providing safe and reliable service, while simultaneously investing in innovative technologies and new business models required for future success. This duality — the coexistence of essential but conflicting imperatives — underscores the need for a new approach. Every utility now needs to consider how to become skilled at both initiating and responding to disruption in ways that engender trust among all stakeholders.
Trust has always been important, but as technology pushes utilities into new frontiers, bringing with it an exponential growth in data, trust becomes the key to a utility’s ultimate success — or failure. The ability to harness this data to improve decision-making will create significant competitive advantages. However, this new digital ecosystem also represents an existential peril if data is not captured, stored, managed, used and disposed of properly.