Joseph Santamaria, Chief Information & Digital Officer, PSEG
For more than a century, the American electric sector has followed a fairly simple business model: Centrally located power plants would generate electricity, and then deliver as much of that electricity as possible along a straight-line network of poles and wires to as many customers as possible.
Customers expected their electricity to be delivered as safely, reliably, and affordably as possible—with service interruptions kept to a reasonable minimum.
But today, our customers’ relationship with electricity is changing in that they are growing more dependent on an uninterrupted, around-the-clock power supply—not only to power their lights and other appliances but also for a growing array of devices that provide information, entertainment and an unbroken line of communication with family, friends and the outside world.
"Driven by new and seamless customer experiences in other sectors—such as retail or transportation—individuals, businesses and communities will expect personalized, frictionless services that fit their lifestyles and aspirations while still maintaining low-cost services"
As our customers’ relationship with their energy company is evolving, so must the utility business model.
Over the next decade, the increasing focus on sustainability and decarbonization, the electrification of transportation, the introduction of distributed energy resources and smart grids—all driven by increasing customer expectations—will require power providers, utilities, policymakers, regulators and other stakeholders to reinvent the electric power value chain.
Driven by new and seamless customer experiences in other sectors—such as retail or transportation— individuals, businesses and communities will expect personalized, frictionless services that fit their lifestyles and aspirations while still maintaining low-cost services.
Consider: Amazon and Uber didn’t invent new products. What they created were new customer experiences for accessing existing products and services. Customers are not buying anything new on Amazon, but they have grown accustomed to the idea of shopping from the comfort of home and having packages delivered quickly to their doorstep. Taxi and limousine services have been around for generations. What’s new is the ability to hail a car-for-hire to a precise location and pay a pre-set price with the touch of a screen.
Customers already are holding energy companies to the high standards set by these new technology-heavy, customer-centric services.
To match the experience that customers are beginning not only to expect, but even demand, from all service-providers, utilities such as PSEG will need to deploy new smart grid technologies, such as advanced sensors, two-way communication networks, Internet of Things platforms, and customer-engagement solutions deployed on a foundational intelligent energy services platform, or iESP.
At PSE&G, we’re calling this new iESP the ‘PSE&G Energy Cloud.’
The PSE&G Energy Cloud is a technology platform that will support a future utility in which real-time grid and customer usage data enable PSE&G to offer proactive and tailored customer ‘next best actions.’ It can help attain unprecedented levels of efficiency and reliability resulting from operational automation enabled by distributed intelligent sensors, advanced distribution management systems, machine learning platforms and other transformative smart grid technologies.
The Energy Cloud will:
• Provide solutions to automate advanced operations and effectively manage the electric grid of the future;
• Support individuals and the community by analyzing large amounts of customer data to predict customer needs, develop tailored solutions and automate customer interactions;
• Optimize energy consumption and sustainability through intelligent demand management and grid operations;
• Provide a platform for PSE&G and others to offer advanced energy services and products directly to customers.
In a future where distributed resources have reached critical mass, electrification of transportation is mainstream, and micro-grids and storage resources are distributed across the utility’s service area, the currently predictable, linear electric distribution model will evolve into an open, distributed network of variable sources of energy and demand points that enables PSE&G to manage efficient and sustainable energy services.