Turning utilities into network service providers is smart

A water, gas or electric infrastructure for a city resembles a network, and utilities are investing in IoT and advanced metering infrastructure (AMI) to make cities smarter and more efficient. (Itron)

Cities and utilities have been building reliable and scalable networks for years, back before IoT was even a buzzword. It is these network platforms and devices that are allowing for growth where utilities can enhance consumer and worker safety and optimize the use of energy across the system to ultimately improve sustainability.

Utilities have made significant investments in IoT and advanced metering infrastructure (AMI) to enable these more efficient operations – and this trend is not slowing down. Recent research predicts that utilities will spend over $113 billion on networking equipment and services over the next 10 years. 

For large utility organizations, efforts to digitally transform operations, improve the customer experience, increase safety measures and focus on reducing their environmental footprint are easier to achieve than for small utilities. They often have the money and technical resources to manage ultra-reliable, industrial-strength IoT networks. To optimize their investments in the years ahead, these organizations have future-proofed their networks, building in extra capacity to handle larger flows of data and growing number of connected devices.

Some utilities are now turning this flexible network capability and capacity into an opportunity to share networks or become a network-as-a-service provider (NaaS) for neighboring communities and small water and gas utilities. This approach is not only one that helps their business but advances partnerships with smaller municipalities and other city departments to help optimize and measure the use of energy within their distribution area and unlock new services.

As the network provider, these larger organizations offer other communities the use of their networks while deepening partnerships and building a cohesive energy grid. It is advantageous for all communities as many small towns and cities do not have the available resources or up-front capital to implement comparable network infrastructures. With this approach, they can immediately benefit from the modern networks already in place to move to AMI and access advanced capabilities such as distributed intelligence.

Impact on industry

By sharing networks, these larger companies are driving change in the traditional utilities’ business model. It opens opportunities to create a stronger grid by breaking down regulatory barriers and bringing digital transformation across entire distribution networks. Larger organizations benefit from leasing and/or selling access to the network, creating a new business benefit and revenue stream. Smaller municipalities can then access the benefits of AMI at a fraction of the time and cost with minimal risk while increasing their return on investments.

Regulatory bodies are starting to relax conditions, letting this cross-functioning and network sharing occur, to make the industry more equitable for grid modernization. These AMI programs are needed to advance consumer and worker safety. When smart meters detect a leak or abnormality, they can shut down a water main or gas pipe in a matter of minutes, thus avoiding potentially dangerous situations for consumers or larger infrastructure issues. IoT network sharing only advances the energy industry for all parties involved.    

Impact on customers

The winner of these partnerships is the customer. In many cases, they may receive advanced electric services from one company - and non-automated gas and water from another, with limited reporting and functionality. By working together, utilities are removing the imbalance and providing a higher level of service to the customer who benefits from a more unified platform.

With the new ability to serve as shared network and NaaS providers, larger utility organizations are taking a pro-active approach to modernizing distribution networks, focusing on safety and environmental concerns over proprietary technology infrastructure. This movement is removing an imbalance to improve customer experiences and make digital transformation more accessible for all utility service providers. Sharing the benefits of interoperable IoT network platforms is the wave of the future for the utility industry, and can be the foundation to build safer, more sustainable, resilient and connected communities.

Ty Roberts is vice president of marketing for networked solutions at Itron, a Liberty, Washington,  company offering  technology and services to improve energy and water resource management in 100 countries.  Roberts has more than 20 years experience with the design, development and delivery of advanced solutions for global utilities.