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INTERNET OF THINGS Is Technology the Key to the Utility Industry Transformation? By Sharelynn Moore, Itron Briefly put: Over 50 percent of utility executives and customers questioned in a recent survey feel utilities are operationally inefficient. They all, however, believe that technology is the key to greater efficiency, the ability to provide more information and transform the industry. Nearly every industry from healthcare to automotive to retail has become more interactive, enabling consumers to engage directly with providers. Technology has infiltrated nearly every aspect of consumers’ lives. People around the world count on the phones in their pockets to provide real-time feedback and access to nearly any information they want – except management of their water and energy. The industry is at a critical point in time. Consumers want the kind of service and real-time pricing information they get from other service providers and the entire sector needs to be more efficient to better manage energy and water. The questions remain: How do we get there? Where are utilities investing? Much of the world’s gas, water and electric infrastructure in developed countries is aging and in need of modernization. Utilities are still relying on the same electric grid that was first built 100 years ago, and many of the water and gas pipes laid decades ago are still used every day. Increasingly, the traditional utility business model is being challenged by renewable energy; microgrids and innovations in energy storage and natural gas extraction are changing the energy mix and the way resources are used. In megacities, utilities and their customers are tasked with being more efficient and finding ways to be more resourceful with what they have. There’s a hunger to improve distribution systems and it’s clear that technology can help us get there. Smart meters can help consumers use less energy and water, analytics can enable utilities to understand consumption patterns and allocate resources, and monitoring and measurement technology can give utilities tools to find leaks, reduce waste and restore power faster during outages. Measuring the Industry To help quantify the challenges facing gas, water and electric utilities, Itron conducted a worldwide study of the utility industry – the Itron Resourcefulness Index. This annual index surveyed 74 countries around the world to gauge how resourceful they think the industry is today, what their current challenges are, and what they see as the potential barriers to advancing the industry and using resources more efficiently. The questions asked of more than 800 informed consumers and 600 utility executives in 14 countries around the world form a picture of perceived resourcefulness of gas, water and electric utilities. The survey findings illustrate gaps between informed consumers’ and utility executives’ perceptions of utility resourcefulness and variations in resourcefulness in regions around the world. Across sectors and around the world, the need for transformation was universally acknowledged; with 94% of utility executives surveyed agreeing that transformation of operations was essential to improved efficiency of gas, water and electric utilities. Despite the diversity of utility types surveyed, common themes emerged. Most notably, nearly all utility executives agreed that technology is key to industry transformation. The survey also revealed that greater resource efficiency is needed and consumers want more information from utilities. The State of Resource Management The Index reaffirmed that more needs to be done to ensure finite resources are managed wisely. Water, gas and energy are fundamental elements to modern society and demands are increasing as the world’s population grows in number and affluence. Nearly 60% of utility executives and 70% of consumers think utilities are not run efficiently, meaning billions of dollars in waste each year combined with inefficient use of limited resources at the very time water, natural gas and electric infrastructure is coming under strain. The interconnectedness of these resources and the increase in demand means that thoughtful management is more critical than ever. The way we manage water, gas and energy will define this century. It’s time for clear industry alignment and action around management to ensure resources can meet demand. While gas, water, gas and electric utilities agreed on the need for transformation and greater efficiency, there were variations among the commodity types surveyed. For example, water utilities are the most concerned of the three major utility groups about aging infrastructure, faced with existing systems that are very old and costly to replace. And while 42% of gas utility METERING INTERNATIONAL ISSUE - 2 | 2014