Unleashing Utility Innovation in an Energy Cloud Future

For utilities, the traditional economies-of-scale, steel-in-the-ground, one-way delivery model is on its way out. In its place, a new ecosystem is emerging – one that is highly distributed, dynamic, and virtual.

While the Energy Cloud signals change, it also opens the door to new opportunities to grow value for customers and shareholders.

In an article for Public Utilities Fortnightly, Jan Vrins, leader of Navigant’s global Energy practice, and Mackinnon Lawrence, senior research director with Navigant Research, say the key to staying competitive in the future is to leverage innovation across new energy platforms while charting a course toward the future as a network orchestrator.

“As demonstrated by Facebook, Uber, Airbnb, and other fast-growing ventures, network orchestrators leverage digital connectivity and deliver value through relationships or network capital,” according to Vrins and Lawrence. “By creating a platform that participants use to interact or transact across the network, these companies may sell products, build relationships, share advice, give reviews, collaborate, and more.”

In the utility realm, working toward a network orchestrator role will require creativity, end-to-end strategy, planning, and a retooling of operations, but most importantly, it will require a framework for utility innovation.

Vrins and Lawrence recommend a three-phase approach that relies on accelerating the time-to-market readiness and reliably producing high quality initiatives.

• Phase 1 – Survey: How is the environment around your utility business changing? What are the potential pathways for market evolution? Where do your utility’s strategic advantages lie?
• Phase 2 – Test: What portfolio of solutions can your organization reasonably deploy today? What mechanisms does your organization have in place to tolerate failure and to improve upon the lessons learned?
• Phase 3 – Adapt: How will you embed a culture of innovation in the DNA of your organization? What capabilities should your organization cultivate to remain viable in the future? What combination of technology platforms offers the most opportunity to leverage your organization’s core strengths?

“Continuous adaptation to opportunities around clean, distributed, intelligent, and mobile energy is completely at odds with utility culture,” Vrins and Lawrence say, but a shift in mindset, executive commitment, and the ability to fail and fail fast can pave the way for long-term success.