Energy and utilities sector can benefit from intelligent automation

Amid an increasingly competitive environment, the global energy and utilities sector is under pressure. New forms of competition, such as innovative startups, marketplaces and decentralised energy generation players are leveraging technology to gain market share. At the same time, consumer demands are changing, with at the forefront a call for more transparency and a growing push for clean, sustainable energy. For incumbents to stay at the industry’s forefront, tapping into the latest technologies is key.

Automation and digitalisation will be critical to address these challenges and to capitalise on opportunities. Technologies, such as robotics process automation (RPA) and artificial intelligence (AI), are playing a pivotal role in managing the balance between demand and supply, boosting efficiencies in all the entirety of the value chain, innovating the customer experience and transforming business models.

More and more executives in the energy and utilities sector are getting to grip with this belief, as per a new report by Capgemini, a global, public-listed professional services firm. To come to its finding, the firm’s researchers surveyed over 500 boardroom professionals and senior managers in seven different countries.

Intelligent automation

The oil and gas segment leads in the deployment of scaled intelligent automation initiatives. This follows from the significant challenges the sector has and is still facing, ranging from the need to cut costs to maintain margins, ensuring safety and reliability in its processes, fluctuating commodity prices, changing regulatory policies and shifting demand. “These factors have been a catalyst for deploying automation and enhancing efficiency across supply chain processes,” explained Philippe Vié, Global Head of Energy & Utilities at Capgemini.

Russia’s Gazprom for example – the globe’s largest natural gas company and the country’s largest enterprise in value – used robotic process automation (RPA) to automate verification of meter readings. In the first two weeks after the automation went live, an employee was able to validate about 130 invalid meter reads, saving 10 hours of work per employee.

Progress has also been made in the renewable energy domain. The American electricity and gas company Xcel Energy uses data from sensors on wind turbines to make accurate wind forecasts based on predictive analytics and artificial intelligence. As a result, the company has succeeded in increasing the efficiency of energy generation, which allowed Xcel Energy to reduce the costs for end users by around $60 million.

At the other side of the spectrum, water utilities companies lag behind in scaled adoption of intelligent automation. United Utilities, the UK’s largest listed water utility, demonstrates the opportunities which are foregone. The company recently tested an AI platform to analyse large data sets on factors such as weather, demand for water, pump performance and electricity prices. The information is used to make decisions on the most cost-effective and efficient way to run pumps, detect burst pipes and minimise the risk of discolored water. During the trial, the utility saw energy savings of 22%.

Scaling-up for more

From a country perspective, maturity in the implementation of automation differs. In the United States, nearly a quarter of all energy and utilities companies have multiple use cases deployed at scale. In France and India, this percentage is 16%, while in the Netherlands and Sweden the percentage stands at just 2% and 0% respectively.

However, on average, the energy and utility sector performs relatively well compared to other sectors studied by Capgemini’s researchers. Among the main benefits that are achieved from automation include an increase in operations quality, improved data accuracy and workforce agility, an increase in staff productivity, a faster turnaround time for service requests, and better and faster compliance with legal / regulatory.

Vié stated: “The energy and utilities sector is already seeing the difference that intelligent automation can make in improving business efficiency, customer satisfaction, and revenue. Executives are quite rightly making the deployment of automation one of their top priorities.”

He added that once companies are acquainted with the first use cases and quick-wins, the focus can then shift to factors that enable a more large-scale deployment and adoption of intelligent automation. “This includes investment in specialist talent, more integrated co-ordination between business units, and a stronger commitment from leadership.”

Related: European countries top WEF and McKinsey Energy Transition Index.