North American Utilities Go Digital as Market Needs Change

North American utilities are adopting digital technologies and services to meet the requirements of decarbonization, changing customer expectations and new legislation, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens Power and Utilities — Services and Solutions report for North America finds utilities in the U.S. and Canada face both challenges and opportunities in the transition to more renewable energy. Like utilities in Europe, where the drive for decarbonization began earlier, they are transforming legacy systems and services to support the move to clean energy use while ensuring grid reliability, security and cost optimization.

“North America’s utility industry is evolving from a highly risk-averse commodity business to a place of rapid innovation,” said Bob Lutz, partner, Energy & Utilities, at ISG. “Everything from infrastructure to business models is beginning to change.”

Governments and corporations in North America are catching up to their European counterparts with initiatives for net-zero carbon emissions, putting pressure on utilities to integrate more clean energy sources into the grid, the report says. Both enterprise and residential consumers are becoming prosumers, with solar panels and other resources that let them sell excess power back to the grid. The increasing popularity of electric vehicles (EVs) further complicates energy demands.

New technologies are helping to future-proof North American utilities against these changes, ISG says. In particular, by collecting more data on the grid and consumers, utilities are improving service reliability and customer service. However, to realize the full potential of data, they need to address issues around data access, quality and governance. Many utilities also face unique challenges to using cloud-based solutions, because current rules allow them to capitalize purchases of on-premises software but not subscriptions to cloud services, the report says.

“To improve grid operations and engage with customers as the energy market changes, utilities need a strong digital foundation,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “Service providers are delivering key capabilities across the grid, in customer engagement and even through business processes to build that foundation.”