How sustainable practices can drive inclusive growth in modern business

India is the third largest producer and consumer of electricity worldwide. As of 31 October 2023, our installed power capacity was 425 Gigawatt (GW), but given the country’s rising population, we can expect a sharp rise in electrification and per capita usage. While the generation numbers are impressive, our power requirement may almost double to 817 GW by 2030, as per Central Electricity Authority estimates.

In addition to enhancing capacity, increased technology adoption can make the current systems more efficient. Technology can play a significant role in resolving many of the issues besides Transmission & Distribution (T&D) losses, such as low reliability, limited accessibility and poor supply quality. Power utilities must focus on these crucial aspects to enable faster transformation, especially technology adoption. The most appropriate approach will, however, depend on several other factors as well.

Types of Indian utilities

There are two distinct models of Indian power utilities — the ‘driven’ and the ‘driver’ — at work, each with a differentiated approach towards digitalization.

The ‘driven’ utilities are those that have undertaken digital endeavors, frequently initiated by the government. These are, however, isolated measures that lack a cohesive strategy to invest in innovative solutions for various reasons — lack of strategic guidance, excessive reliance on run-of-the-mill solutions to complex financial and operational challenges, limited engagement and focus on customer centricity coupled with commercial inefficiencies in metering, billing, and collection.

In sharp contrast, the ‘driver’ utilities exemplify a distinct approach. They display a seamless integration of digital initiatives and innovation, demonstrating enthusiasm for adopting digitalization. Their leadership provides a strategic vision and by adopting a digital-first approach, such utilities pursue inventive solutions, invest in state-of-the-art technologies, and cultivate a culture of ongoing enhancement. Despite financial constraints, they prioritize digital interventions and allocate resources, acknowledging the transformative potential of digitalization for streamlining costs, enhancing efficiency, and serving consumers better.

Road to digitization for utilities

To march into a sustainable future, the driven and driver power utilities need to reassess their digital strategies to foster a culture of innovation and establish themselves as true adopters of digitalization. The utilities can be mapped on specific parameters and their technology adoption synchronized accordingly. Some of the key parameters for consideration can be:

Technology readiness assessment: Every power utility should undergo a comprehensive assessment to highlight its readiness and capabilities before any state-of-the-art technology is implemented. Such assessments may include factors such as existing infrastructure, technological maturity, skills of the workforce, financial strength, and operational constraints. This evaluation is necessary as utilities may lack infrastructure or the skills to adopt advanced technologies. Hence, it would make business sense to first build the right ecosystem and then introduce the technology for a better outcome.

Digital maturity ratings: The governing authorities can analyze and review the existing state of each power utility and classify its level of digital maturity. It must also consider the ‘hidden costs’ that lack of technology can have on the organization, in terms of inefficiencies and lost opportunity costs. The potential benefits of implementing advanced digitization initiatives should be highlighted as well. A structured roadmap can then be developed while calculating the Return on investment (ROI) from technology adoption. Prior to introducing the technology into the system, a pilot can be quickly rolled out to gauge the intervention’s success.

Differentiated approach: There is a need to look at designing a differentiated strategy based on the assessment of ‘drivers’ and ‘driven’ power utilities. For utilities that are already advanced in terms of digitalization, the focus can be on further enhancing their capabilities through targeted investments and support. But utilities that lag in technology adoption can start by building a strong foundation. The governing authorities can support such organizations by facilitating capacity building, infrastructure development, and the introduction of basic digitalization initiatives.

Flexibility and scalability: Power utilities must develop flexible ecosystems that support quick approvals and top management buy-in on Proofs of Concept, pilots, etc. Measures that prove to be successful can be scaled up easily and will also advance industry’s interest in developing innovative technological solutions to resolve prevalent issues.

Right talent: The power utilities, both ‘driven’ and ‘driver,’ can expedite the tech transformation journeys by leveraging their existing workforce. The need is to equip the workforce with the right skill sets and train them in new technologies and digital operations. These employees already have years of rich experience and adding formal upskilling programs would enable them to adapt to the changing industry needs. At the same time, power utilities should focus on building a workforce for the future and infuse new skilled talent into the system for managing the increasing technology interventions in the sector. Incentivizing a skilled workforce is a quick-win measure that utilities must consider.

Knowledge sharing, collaboration and training: A unified platform can be created for power utilities to share insights, experiences, successes and failures with each other. The government can facilitate knowledge sharing, collaboration, and training initiatives for continuous improvement and growth within the power sector. Moreover, all types of utilities must work together and engage in skill building initiatives by investing in employee development for the overall growth of the power industry.

Powering the utilities of the future

Technology is a great tool of advancement for power utilities. The governing authorities can play a key role in identifying the gaps and bridging the digital divide that currently hampers the utilities and prevents them from functioning at their full capacity. It will not only allow the utilities to thrive in an ever-evolving digital and interconnected world, but also empower them to enhance customer experience and their sustainability quotient.

To be a sustainable power utility of the future, the impetus must be on aggregated loads, which can eventually be scaled to ensure optimal peak load management through demand aggregation, empowered by software and hardware, along with process, procedure and institutional modification.