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Innovation lag is holding the industry back from future changes, leading to the need for reliability and security when it comes to IoT in utilities.

Utilities customers expect the television to turn on, clean water to gush from the tap and the furnace to kick in if the temperatures dip. 

Those unceasing demands for reliable service, however, could be holding the utilities industry back from innovating for the future, analyst said. 

“Keeping the power flowing isn’t a trivial responsibility,” said Neil Strother, principal research analyst with Navigant. “Utilities are not geared to the speed of a startup or Silicon Valley. They’ve made a commitment to keep millions of lights on.” 

Matt Schnugg, senior director of data and analytics, ML/AI at GE Power Digital, agreed, adding that conservative investment policies and unwieldy governance structures can also hinder innovation. 

As a result, utilities “may not have evolved as quickly as the technology has innovated or the business model has evolved,” he said. 

Along with financial and governmental institutions, utilities are among the slowest industries to move to the cloud, analysts said. Mounting cyberattacks demand vigilant security protocols and there’s a strong tendency to want to keep data and compute nearby.

Wide-scale cloud adoption by utilities is unlikely, at least in the foreseeable future, Schnugg said. “There are always latency issues with processing and the need for real-time analysis, so those servers are generally located on prem for use in the control room.” 

In the meantime, the balance of compute will likely shift toward the edge given the proliferation of connected devices and potential for fully automated intelligence sharing.

“I can send off thousands of cores running an algorithm with 15 years of data on the Eastern sea board, scale up, and back,” Schnugg said. “You can’t achieve that on premises from a cost-efficiency perspective.” 

Cloud-based platform solutions, however, that ingest data from multiple nodes and third parties can provide vital intelligence, said Lance Brown, vice president, customer service solutions for Smart Energy Water, a SaaS and analytics provider in the utilities industry. 

For example, you can analyze data from hundreds of utility users in an area to gauge average consumption, identify anomalies in usage because of leaks and suggest opportunities for conservation programs or demand response buying to eliminate strain on the grid, said Brown, formerly the director of customer service with Los Angeles Dept. of Water and Power. “It’s all scalable and we can eliminate real waste.”  

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