Over the past number of months, countless lives and businesses have been impacted by the events surrounding COVID-19. Many businesses were forced to adapt quickly to the sudden changes in an effort to protect the health and safety of their employees, keep their businesses running and customers happy.
In these unprecedented times, utility companies have faced a unique challenge due to COVID-19. The utility industry was once thought to be recession-proof, due largely to the fact that utility companies and the services they provide are essential. Therefore, making many utility employees to be considered essential workers during COVID-19.
However, like countless other industries, the utility industry has been heavily impacted by the pandemic. Thankfully, there are ways for utility companies to navigate, adapt and feel better prepared to manage uncertainties post-COVID-19 and beyond.
It’s time for utilities to rethink remote work
COVID-19 has created a unique challenge for the utility workforce. Almost everything has seemingly changed – from processes and workflows to rates and peak hours. Although many utility employees have been able to carry on their roles remotely, not all employees have remote work as an option. For example, consider utility employees who work out in the field – these are essential workers (that keep everyone’s lights on!) who are unable to work remotely, and need to continue their work as safely as possible during the pandemic.
As many employees will continue to work remotely even after the pandemic is over, it’s important for utility companies to be prepared for a remote workforce. This is especially true when considering your IT infrastructure – something you want to keep running smoothly, regardless of how many people are physically working in the office.
As a solution, consider researching and weighing the possibility of adopting a modern software system that allows for remote work. There are new software solutions designed specifically for the energy industry that allow for planning and operations remotely in the most efficient way. These web-based solutions allow for seamless integration, easily automating manual, paper-based administrative tasks.
Utility companies need to reconsider load forecasting
Again, like many industries impacted by the pandemic, many utility companies have had their revenue models impacted by COVID-19.
Revenue models have been impacted mainly due to the changing load levels. Specifically, both consumer and industrial electricity load is way down. Why? People have been using less power, at fixed rates that have been decided for that rate cycle, and therefore utility companies are not able to generate as much revenue.
Reports from IESO show a reduction in demand across all hours ranging from 6-18% in Ontario. South of the border in the United States, weekday demand has decreased between 9-13%. Globally, COVID-19’s impact on electricity has resulted in a demand reduction of about 10%, according to the IEA.
However, this impact to utility companies’ topline is limited, largely because rates are locked in per rate cycle, with some regional variances. Most utility companies can readjust rates for the next rate cycle, but not without challenges. Pressures on the practicality of utility spending is higher than ever because of the large downward pressure on rates due to COVID-19.
Utilities used to be able to see economic development in an area and assume that load would typically increase with that development. That’s no longer the case thanks to the level of uncertainty around load generation, storage, and the rapid increase of electric vehicles. This uncertainty means an increase in risk to utility revenue models.
To adapt in a post-COVID-19 world, utility companies need to change their previous assumptions around load generation forecasts. By adapting forecast models and preparing for more energy efficient options on the grid, utility companies can prepare for the new normal.
Utility business in the “new normal”
Whether or not you feel prepared for change, if you work in the electric utility industry you’ve probably had to adapt in many ways since the onset of the COVID-19 pandemic. The best thing to do is to keep an open mind and be ready for unexpected changes in the new normal of work and life.
There is more and more regulatory pressure on utility companies to invest in non-wire solutions. Meanwhile, many utility companies seek to lower their overall CapEx (expense that business incurs to create a benefit in the future) and OpEx (everyday business function expenses).
Utilities also need to think about how to become more agile when it comes to planning around the grid and the grid business. Load is expected to continue to flatten, and previous assumptions around peaks and valleys need to be reconsidered (especially considering the large number of people working at home). Plus, electric vehicle sales have resisted threats under COVID-19, despite the impact the pandemic has had on the auto industry worldwide.
All of this requires a change in the way of thinking about “business as usual”. To do this, utility companies can also look at investing in more intelligent analytics. These intelligent systems will be needed to help utilities with their grid analysis and develop more effective grid investment plans for the future.
The utility business in a post COVID-19 world
It’s clear that COVID-19 has changed the world and the way we work. Although change can be difficult, it’s important for utility companies to assess their current processes to see what can be made web-based to allow for remote work, how they can think differently about load forecasting, and begin preparing for business in the new normal.