Nov 5, 2018

Igloo Energy insight: Big Six profit dive points to opportunities for brands and consumers

Power
Matt Clemow
3 min
Igloo Energy CEO Matt Clemow on the merger of npower and SSE and how this might transform the market.
Igloo Energy CEO...

Igloo Energy CEO Matt Clemow discusses the UK's changing energy market and the opportunities increased competition can present for consumers. 

 

Results out earlier this month revealed the profits of the UK’s Big Six (the six main energy providers in the UK: British Gas, EDF Energy, E.ON, Npower, Scottish Power and SSE) fell for the first time in four years – by far more than just pennies. Collective profits dropped a massive 10% from $1.3bn (£1bn) to $1.17bn (£900mn), as 1.4mn customers moved to challenger brands in the last year alone. But this comes as no surprise. In fact, it’s a sign of things to come.

 

SSE & npower signal cracks are emerging

The Big Six have long dominated the energy market, despite the fact they are notorious for providing lacklustre customer service and the highest tariffs. Given this it is surprising to see that the Competition and Markets Authority gave the SSE and npower merger the green light.

With the Big Six to become the Big Five, bill payers can be forgiven for thinking this will lead to less competition within the energy market and higher prices as a result. But this certainly doesn’t have to be the case; with the rise of challenger brands which offer consumers fairer rates and improved customer service, it’s time for bill payers to put an end to the domination of the energy ‘dinosaurs’.

 

See also:

Inside Gazprom Energy, the UK’s leading gas supplier

E.ON’s renewable energy earnings up 15%

Read the latest issue of Energy Digital magazine – out now!

 

Tired of ‘tease and squeeze’

Unsurprisingly, consumers are growing tired of the traditional ‘tease and squeeze’ model which penalises customer loyalty rather than rewarding it. Customers are drawn in by unsustainably cheap introductory offers, but once these end, they are automatically switched onto a provider’s rip-off standard tariff. The somewhat dishonest premise of this is that providers rely on their customers to forget that the offer has ended.

The successful rise of challenger brands indicates that we’re seeing a greater awareness of – and fight back against – the tease and squeeze model. Saying that, 60% of consumers are still stuck on their provider’s most expensive tariff after being lured in by these offers, according to Ofgem. If things are to change, it is crucial we raise awareness so consumers take action and do not let themselves be taken advantage of.

 

It’s (not) all about the money!

With consumers becoming more mindful, they demand more than just a good price; they are also looking for their energy provider to help them do their bit for the environment.

As a smaller supplier, we’re spearheading the drive towards a sustained reduction in consumption. We’re working with BEIS (Department for Business, Energy and Industrial Strategy) to develop tech that analyses consumers’ usage in granular detail to provide highly personalised recommendations on how to best reduce consumption. After all, the greenest unit of energy is the unit you don’t use.

Big providers simply don’t have the agility to deliver this to their customers – it would cost millions and a complete transformation of their business model. Instead, they will continue to rely on a model where high energy usage means high profits. As a result, savvy consumers will move on, and we’ll see the Big Six’s profits fall even further.

 

Power back in the right place

Challenger brands are proving formidable competition as they provide consumers with an important alternative; access to better prices, customer service, and tariffs that are tailored to suit them, not to rip them off.

The decline of the Big Six is a healthy signal that power is moving back to where it should be – in the hands of consumers.

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Jun 12, 2021

Why Transmission & Distribution Utilities Need Digital Twins

digitaltwins
Technology
Utilities
Management
Petri Rauhakallio
6 min
Petri Rauhakallio at Sharper Shape outlines the Digital Twins benefits for energy transmission and distribution utilities

As with any new technology, Digital twins can create as many questions as answers. There can be a natural resistance, especially among senior utility executives who are used to the old ways and need a compelling case to invest in new ones. 

So is digital twin just a fancy name for modelling? And why do many senior leaders and engineers at power transmission & distribution (T&D) companies have a gnawing feeling they should have one? Ultimately it comes down to one key question: is this a trend worth our time and money?

The short answer is yes, if approached intelligently and accounting for utilities’ specific needs. This is no case of runaway hype or an overwrought name for an underwhelming development – digital twin technology can be genuinely transformational if done right. So here are six reasons why in five years no T&D utility will want to be without a digital twin. 

1. Smarter Asset Planning

A digital twin is a real-time digital counterpart of a utility’s real-world grid. A proper digital twin – and not just a static 3D model of some adjacent assets – represents the grid in as much detail as possible, is updated in real-time and can be used to model ‘what if’ scenarios to gauge the effects in real life. It is the repository in which to collect and index all network data, from images, to 3D pointclouds, to past reports and analyses.

With that in mind, an obvious use-case for a digital twin is planning upgrades and expansions. For example, if a developer wants to connect a major solar generation asset, what effect might that have on the grid assets, and will they need upgrading or reinforcement? A seasoned engineer can offer an educated prediction if they are familiar with the local assets, their age and their condition – but with a digital twin they can simply model the scenario on the digital twin and find out.

The decision is more likely to be the right one, the utility is less likely to be blindsided by unforeseen complications, and less time and money need be spent visiting the site and validating information.

As the energy transition accelerates, both transmission and distribution (T&D) utilities will receive more connection requests for anything from solar parks to electric vehicle charging infrastructure, to heat pumps and batteries – and all this on top of normal grid upgrade programs. A well-constructed digital twin may come to be an essential tool to keep up with the pace of change.

2. Improved Inspection and Maintenance

Utilities spend enormous amounts of time and money on asset inspection and maintenance – they have to in order to meet their operational and safety responsibilities. In order to make the task more manageable, most utilities try to prioritise the most critical or fragile parts of the network for inspection, based on past inspection data and engineers’ experience. Many are investigating how to better collect, store and analyze data in order to hone this process, with the ultimate goal of predicting where inspections and maintenance are going to be needed before problems arise.  

The digital twin is the platform that contextualises this information. Data is tagged to assets in the model, analytics and AI algorithms are applied and suggested interventions are automatically flagged to the human user, who can understand what and where the problem is thanks to the twin. As new data is collected over time, the process only becomes more effective.

3. More Efficient Vegetation Management

Utilities – especially transmission utilities in areas of high wildfire-risk – are in a constant struggle with nature to keep vegetation in-check that surrounds power lines and other assets. Failure risks outages, damage to assets and even a fire threat. A comprehensive digital twin won’t just incorporate the grid assets – a network of powerlines and pylons isolated on an otherwise blank screen – but the immediate surroundings too. This means local houses, roads, waterways and trees. 

If the twin is enriched with vegetation data on factors such as the species, growth rate and health of a tree, then the utility can use it to assess the risk from any given twig or branch neighbouring one of its assets, and prioritise and dispatch vegetation management crews accordingly. 

And with expansion planning, inspection and maintenance, the value here is less labor-intensive and more cost-effective decision making and planning – essential in an industry of tight margins and constrained resources. What’s more, the value only rises over time as feedback allows the utility to finesse the program.

4. Automated powerline inspection

Remember though, that to be maximally useful, a digital twin must be kept up to date. A larger utility might blanche at the resources required to not just to map and inspect the network once in order to build the twin, but update that twin at regular intervals.

However, digital twins are also an enabling technology for another technological step-change – automated powerline inspection.

Imagine a fleet of sensor-equipped drones empowered to fly the lines almost constantly, returning (automatically) only to recharge their batteries. Not only would such a set-up be far cheaper to operate than a comparable fleet of human inspectors, it could provide far more detail at far more regular intervals, facilitating all the above benefits of better planning, inspection, maintenance and vegetation management. Human inspectors could be reserved for non-routine interventions that really require their hard-earned expertise.

In this scenario, the digital twin provides he ‘map’ by which the drone can plan a route and navigate itself, in conjunction with its sensors. 

5. Improved Emergency Modelling and Faster Response

If the worst happens and emergency strikes, such as a wildfire or natural disaster, digital twins can again prove invaluable. The intricate, detailed understanding of the grid, assets and its surroundings that a digital twin gives is an element of order in a chaotic situation, and can guide the utility and emergency services alike in mounting an informed response.

And once again, the digital twin’s facility for ‘what-if’ scenario testing is especially useful for emergency preparedness. If a hurricane strikes at point X, what will be the effect on assets at point Y? If a downed pylon sparks a fire at point A, what residences are nearby and what does an evacuation plan look like?

6. Easier accommodation of external stakeholders

Finally, a digital twin can make lighter work of engaging with external stakeholders. The world doesn’t stand still, and a once blissfully-isolated powerline may suddenly find itself adjacent to a building site for a new building or road. 

As well as planning for connection (see point 1), a digital twin takes the pain out of those processes that require interfacing with external stakeholders, such as maintenance contractors, arborists, trimming crews or local government agencies – the digital twin breaks down the silos between these groups and allows them to work from a single version of the truth – in future it could even be used as part of the bid process for contractors.

These six reasons for why digital twins will be indispensable to power T&D utilities are only the tip of the iceberg; the possibilities are endless given the constant advancement of data collection an analysis technology. No doubt these will invite even more questions – and we relish the challenge of answering them. 

 

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