Why only utilities that go digital will survive
Gone are the days in the utility industry where the consumer thought no more about their energy consumption than when it came time pay the bill. Today, with myriad apps and portals on the internet, many energy consumers have become “prosumers,” according to Greentech Grid.
Consumer engagement with utilities through digital means has significantly affected their attitudes and outlooks. According to a survey by Accenture, consumers who take advantage of the digital opportunities their utilities afford them trust their energy provider to help them optimize their energy consumption.
This means that the utilities who offer digital services have a competitive edge over those who don’t.
Digital consumers are generally happier and more satisfied with their utility service. A poll of more than 11,000 energy consumers in 21 countries revealed that nearly 70 percent of digital consumers are satisfied with their energy provider—14 percentage points higher than those who do not use digital channels. Furthermore, 42 percent of digital consumers say they would recommend or promote their utility, versus just 13 percent of non-digital users.
Utilities have new competition due to digitalization as well. Having tried the rewards and benefits of digital technology, consumers are beginning to expect high levels of freedom and flexibility with their home energy use. As rooftop solar, electric vehicles and battery storage become more prevalent, consumers are becoming more and more proactive and assertive. Simultaneously, Apple, ADT, Google, Samsung, Verizon and Wal-Mart are teaming up with new and existing hardware and software companies to create new home energy management solutions.
Still, utilities have a competitive edge because, currently, they are more trusted than their competitors. It’s not too late for them to create new revenue by offering digital solutions, like solar, energy-efficiency tools and programs, or bundled home services. In regulated markets, utilities can get involved in innovative partnerships or digital information services.
The connectivity of energy and everyday devices, like the refrigerator, is dramatically increasing the amount of personal information regarding consumer habits. Utilities can jump on this, by ensuring their customers’ data privacy. Consequently, they can use the information they collect to develop more personalized products and services.
Quoted in Greentech Grid, Global Managing Director of Accenture Energy Tony Masella drives home this last point. ““In fact, they must do this to remain competitive, given that barriers to entry are coming down and utilities must now compete with startup digital retailers and new entrants from other industries, which are offering new and bundled solutions and services,” he said.
Traditional utility companies that are not digitalizing yet must start now. The ones that have started need to improve their digital services and platforms. “41 percent of survey respondents said their digital experience with their energy provider was fraught with more difficulty than their dealings with other types of providers,” reported Greentech Grid.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.