It’s a great time to be working on innovation in the power sector. Technology advancements that were once thought to be fringe (to the sector), are now coming mainstream. Utilities are starting to develop their solar panel deployment strategies as the price of solar continues to plummet (image below), the ‘wait and see approach’ that was prevalent in 2016 due to political uncertainty is now giving way to ‘what projects can we deploy’ in 2017. And of course the upstarts, Tesla et al, are ramping up their offensive against the traditional utility with announcements of solar roofs and new gigafactories. It’s feeling like the disrupted (utilities) might finally be waking up to the inevitability of disruption.
GTM Research, solar price drops
But what we are missing in all this hype is how the true disruptions will only happen when we shift attention from a purely business-model-focused industry to a customer-centric approach to business. And by customer I mean the people (customers and employees) who interact with this industry every single day. It doesn’t even require a need to look for technologies beyond what we have at our disposal now. The industry just needs to shift its focus by saying ‘how can we delight our people?’ Because, as we are finding out from Jeff Bezos and co, when you place crazy emphasis on delighting people and serving their true needs (with empathy), the money will surely follow. Below are three customer-centric business models, utilizing the technologies we have today, that will play a big part in the near and far future of the utility industry.
Customer centric models
- Minigrids for those who actually need it: I was recently in Nigeria for some work with a client who is deploying a minigrid for a military location that is taking itself off the centralized grid. This is not the typical ‘let’s provide solar panels to poor Africans model’ (a model which isn’t quite working as it was intended to), this is a smaller version of the grid defections that Amazon, Apple and Google are pioneering. It’s a new business model that is based on the realization that even small commercial customers are interested in getting in on the solar price drops. A service company that can provide a small solar array combined with a battery pack will win in this customer-centric model. It’s about getting into the heart of the customer by providing what they desire. Grid defection will not happen at scale, it will be small services provided to desirous customers. Impact: grid defection by smaller businesses leading to less demand on the grid and a reduction in revenue for the centralized power generators.
- Electric cars for the masses: Tesla proved we want electric cars; 500k pre-orders of the Model 3 was a resounding response to an industry question that no one else had bothered to ask us for an answer. Well, no one but the Chinese electric car manufacturers anyway. Yes, manufacturers with an ‘s’. There are at least 4 electric vehicle manufacturing companies in China selling their cars for about the same price as a second hand Honda Accord. A client of mine went to China for a business trip was stunned when he got into an all electric taxi cab. The average consumer will buy an electric car if they can afford one. The market will buy and the usage profile will change the utility model. Impact: more electric cars will act as power storage units in homes. This will result in a change in usage profiles (fewer usage peaks) and a drop in revenues for the utility.
- VR/AR for employee training: In the conversation about the changing nature of the power industry, the employees in the industry are getting the short end of the stick; they often get ignored despite the great work they do (I’ve been guilty of ignoring them in my blog posts too!). Utility industry employees are only spoken about in terms of the fact that about 50% of linesmen and engineers will be retiring in the near future. I worked on some (yet to be released) research recently showing that this loss of talent will be higher than previously reported. The increased pace will be due to the pace of technological advancements and the failure of the industry to (re)train their teams quickly enough and at scale. Thankfully, this dire situation can be reversed quickly without incurring the ire of NERC. I’m super excited to be working with VRAmericas to develop training materials for the utility employee of the future. The sooner we start to pay attention to the training and personnel development needs of the workforce and using the technology available to us now, the better for the industry! The video below shares more on the work (contact me at seyi at asha-labs dot com to learn more). Impact: A new and better trained workforce able to adapt to a changing technology landscape. Even more impact: The use of this technology to increase job generation, especially for in-demand sectors, in every city all over the world. It increases opportunities for low-income low skilled workers to obtain acquire training in less time than traditional training.
Augmented Reality Training
- VR/AR For Consumer Education: A more customer-serving possibility for VR/AR/MR application comes from an experience by Kara Platoni, the author of We Have The Technology. In a virtual reality simulation, she is taking a shower while, just within her view outside a window, her avatar is, in her words, ‘eating coal’, an act which made her more aware of the impact of her water wastage. VR made her more empathetic to the planet. The point here is that virtual reality can also be used as an empathy machine that starts to educate consumers, at a more cognitive level, of the results of their actions as the user consumes water/electricity or energy that we deem it necessary to conserve for sustainability reasons. Never before have we had a tool that is powerful enough to fool our brains into truly believing that the virtual world is now real. Impact: more sustainability focused consumers, at scale.
VR/AR for Training As A Positive Disruption
Since I use two examples of VR/AR above, I’ll dive a bit deeper into VR/AR and its impact on the utility industry. In whatever form you’ve experienced or seen Virtual Reality (VR), the basic premise is computer technology that is specifically developed to alter sensory perception. Fully altered sensory perception is known as virtual reality (VR). Partially altered sensory perception, say with images overlaid on what you can actually see as was the case with Google Glasses, is called augmented reality (AR). When the viewer can interact with the images overlaid on reality, this is known as mixed reality (MR). In any of these three cases, human beings react emotionally, physiologically and intellectually to the virtual imagery that is perceived through these computers. The promise of VR and AR has been long coming with several failures that have jaded the market to their true potential. Cabin simulators, developed by Thomas Furness in the 1970s, can be considered the first version of virtual reality that successfully found commercial applications. The pilots did not for one moment forget that they were in a simulation, even though the experience was immersive. In 1995 Nintendo released the Virtual Boy, which gave wearers headaches from both the poor quality of the imagery and the size of the device. But with the dawn of supercomputing and the miniaturization of computers, the promise of truly immersive digital experiences that mimic reality can now be fulfilled.
Immersive virtual reality systems use a combination of movement and position sensors, along with supercomputing power and software, to fool the wearer in three dimensions of depth, perception and dimension.
The use of virtual reality, augmented reality and mixed reality to provide training and simulations will enable knowledge transfer and retention to curb the problem of an aging workforce before it becomes a catastrophic issue for the industry. (55% of the utility workforce will be eligible to retire in the next 5 years.) Similar to what was possible through flight simulators, utilities can upload their systems, processes and plans into a virtual reality system and train new employees in the engineering required to, for example, fix a gas turbine. Current methods of training, some of which I witnessed on a trip to northern Illinois a few years ago, involve simulations that, while just adequate, can be augmented. These new technologies can provide and capture enough data to embed the true experience into the understanding that new employees will need to ensure a stable and reliable electricity supply, even as tens of thousands of veteran staff start to leave the workforce.
There is a need to focus on the people involved here, and not the business models. I wish I could say this in a much stronger way. When we as an industry serve the customers and employees the money will surely come.
If you liked this you should check out ’10 Startup Lessons from 40 Books I read in 2017', ‘9 Books To Boost Your Understanding of Technology Systems’ and my book 40 Semi-Obvious Startup Lessons.
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