Practical lessons and opportunities where tech and tradition collide
Today we face an inescapable reality: Digital technology permeates almost every area of life, both personal and professional. The way we transact, the way we do business and even the way we socialize, are influenced—if not dictated—by a plethora of smart technologies designed to meet our everyday demands, faster and more efficiently than ever.
Yet, while few industries have escaped the digital tsunami that has engulfed the world, the utilities sector has remained stubbornly on the periphery. Utilities have resisted the current that has propelled firms in other sectors, such as telecommunications and banking, into cyberspace—a space where digitization and mass socialization are no longer an advantageous exception, but increasingly the norm.
In many ways, this apparent immunity is unsurprising. Utilities have historically under-invested in information technology, focusing instead on the operations technologies that enable their core business of generating, transmitting and distributing power. In doing so, they have typically taken a reluctant approach to IT, viewing it as a necessary evil for customer management and revenue collection.
“The smart grid detects, deters and mitigates potential threats to utilities, and is able to restore systems rapidly and efficiently in the event of an attack.”
The tide, however, is slowly changing. Following the lead of other industries, utilities are now waking up to the insatiable thirst among consumers for smart, interactive services. And, in the process, they are identifying many potential benefits of smart technology, not just to the increasingly sophisticated customer, but to their own business.
Enter the smart grid.
A blend of classic electric grid with information, communication and control technologies, the smart grid is helping utilities overcome many of the obstacles that stand in their way, delivering results for companies and consumers alike. Designed to overcome weaknesses and enable new services in conventional electrical grids, the smart grid manages vast amounts of energy and information, while delivering more and costing less—much like the Internet.
The result is greater control over the production, transmission, distribution and retail of electricity, as well as increased efficiency along with the reduced consumption and cost of energy.
This array of advantages creates a compelling case for smart grid deployment in the Middle East and North Africa (MENA), yet the early smart grid ventures in MENA’s utilities space have yielded limited success to date. Across the region, smart grid projects have fallen short of expectations—a consequence of ineffective planning, weak vendor accountability, absence of "post-mortem" analysis, and a focus on technology rather than a comprehensive operating model transformation.
Clearly, the progress still to be made is great if both the smart grid and utilities are to reach their potential, but so too is the opportunity.
This Viewpoint explores the trends, challenges and implications at play in the smart grid space. More importantly, it offers practical lessons to MENA’s utilities and uncovers the opportunities that exist at the sweet spot where technology and tradition collide.
