On the eve of Greentech Media’s Soft Grid 2013 conference taking place in San Francisco this week, here’s yet more evidence that data analytics remains one of the utility industry’s most challenging, yet most promising, tasks to take on in the years to come.

That’s the news from a report released last week by Capgemini and IDC Energy Insights, which found that data analytics is expected to be the trend with the most impact on the utility business over the next five years. At the same time, the report found that “[d]espite the common agreement that analytics will create value for utility operations and utility customers, utility respondents do not have a well-developed analytics strategy.”

This isn’t news to readers of Greentech Media, which has been reporting on the disconnect between the value of utility analytics and the lack of preparation for its implementation for years now. Still, it’s a good reminder that utilities, despite the key challenges they face in implementing analytics, are well aware of the challenge ahead.

GTM Research has pegged the value of the global utility data analytics market at a cumulative $20 billion between 2013 and 2020, growing from an annual spend of $1.1 billion this year to nearly $4 billion by decade’s end. But it has also identified barriers, including the technical issues involved in renovating or replacing legacy utility IT systems to manage and optimize the flood of new data coming at utilities, as well as regulatory and internal business process obstacles.

Capgemini and IDC based their report’s conclusions on a decidedly small sample size -- researchers interviewed fourteen utility executives from twelve U.S. utilities, including nine investor-owned utilities and one municipal utility, one government-owned and one privately held utility. But Capgemini and IDC did target utilities with some pretty big market heft, with median annual revenues of $10 billion and an average customer base of 5.5 million.

Here’s an excerpt that summarizes the report’s key findings:

“Utilities have invested heavily in smart meters and distribution devices but have yet to realize promised and expected benefits from these investments. Recent publicized outages have demonstrated the importance of establishing a new relationship with customers, aside from the monthly bills. Promised developments such as distributed energy and electric vehicles remain over the horizon, and few utilities have been proactive about planning and understanding the impacts they will have.”

The report also highlights the analysis of time series data from smart meters, sensors and SCADA systems as top priorities for utilities. Use cases mentioned by utilities include transformer loading analysis, as well as for target-marketing of energy-efficiency and demand-response programs.

These are just the kinds of analytics capabilities on offer from a host of smart grid and utility IT vendors, many of which will be represented at this week’s Soft Grid 2013 conference. The list includes startups like AutoGrid, C3 Energy, Trove, Opower and Verdeeco, IT giants like Oracle, IBM, SAS, Teradata, EMC and SAP, and grid giants including General Electric, Siemens/eMeter, ABB/Ventyx, Schneider Electric/Telvent, Toshiba/Landis+Gyr and more.

Many of these would-be competitors are also partnering up to deliver business intelligence and smart grid analytics capabilities that cross the traditional boundaries between utility business operations. Simply differentiating the variety of big data analytics options out there, and how well they stack up against one another in meeting utilities’ specific business needs, is a major barrier to quick adoption for the grid.

Indeed, Capgemini and IDC’s report makes clear that utilities will need to plan ahead to avoid either under-investing or over-committing to new IT deployments. Right now, most analytics are project-based, but soon enough, “there will be opportunities for utilities to capture and analyze large quantities of both structured and unstructured data,” which may require significant investment in new IT capabilities.

At the same time, “many benefits can be derived with advanced analytics on top of data systems using current storage technologies,” the report finds. In other words, prepare to take the IT hardware vendors’ sales pitches with a grain of salt.


For insight into topics like these and more, sign up for Greentech Media's Soft Grid 2013 conference, which returns for its second year on October 1-2 in San Francisco. Get a taste of what’s to come, as well as the latest updates on market trends and forecasts, with this free GTM Research soft grid market update.