Logica sees major smart grid challenges ahead

Stuart Corner
Tuesday, 07 December 2010 11:19

IT Industry - Strategy

Logica has followed up its October 2009 survey the smart grid industry in Australia with new survey that shows significant progress in the last 12 months but identifies massive challenges for the energy sector in developing the more intimate customer relationships and developing the new business models that smart grids will engender.

"Smart Grids have evolved from 'hype to reality'," Logica said. "All respondents are now rolling out their smart grid strategies and many are completing pilots, which shows there has been massive progress since the 2009 study."

However Logica's study identifed only limited progress in the business attitudes to smart grids in the past 12 months. "One of the more striking revelations of the previous survey was the extent of the technological focus of the smart grid community," Logica said.

"Many businesses are slowly recognising that fundamental industry change is the only route to the smart grid. As such, they are at least beginning to talk the talk of new business processes and commercial change as critical enablers. But at the same time, talk of pilots and existing projects too often focuses on technology and not on new ways of working and the desired organisational culture."

Logica warned that: "It is all too easy for electricity distributors to fall back into a comfort zone of new gadgets on the network or new algorithms for smart control systems'¦ [But] focusing on technology will not yield the real benefits of the smart grid, which can only come from genuine industry transformation'¦

"Technological developments are needed, but they are just a beginning. Entirely new business processes, practices, collaborations and relationships are as important to facilitate a move towards a smarter electricity distribution network."

However it said that energy companies appeared to see technology as the biggest challenge. "Energy companies all agreed this is one of the most difficult things the industry has ever confronted'¦ Technology issues were cited as some of the biggest challenges."

Logica believes that, for energy companies, shifting consumer customer relationships from the minimal level of interaction they have at present - billing them once per quarter for electricity used - to a much more intimate level - will be one of the biggest challenges.

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