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Enabling the Connected Energy Customer Through Cloud and Voice Services

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Enabling the Connected Energy Customer Through Cloud and Voice Services 2

Executive SummaryFor more than a century, electric utilities have focused on the sale of a single commodity. The

proliferation of distributed energy resources, advanced analytics and increasingly connected

homes and businesses is now opening up the opportunity for utilities to think and act less like

traditional providers of electricity and more like innovative retailers with an array of products

and services that empower and delight customers, all while ensuring the safe and reliable

delivery of power.

Simply put, the pressure to deliver increasing value for utility customers is mounting and non-

utility players are willing to step in as intermediaries if the incumbents fail to act. Electric utilities

intent on maintaining their customer base – and revenue lows – must transform how they interact with increasingly connected energy consumers.

According to Wood Mackenzie Power & Renewables

• In the next ive years, connected devices in the U.S. home will impact more than 100 gigawatts in energy demand

• More than 65 million U.S. homes will have at least one voice-based digital assistant by 2023

• In the coming years, the majority of households will regard voice-assistant devices as the “brain” of a smart home

With the proliferation of distributed solar, electric vehicles and energy storage, along with

the adoption of devices such as smart speakers and Wi-Fi thermostats, utilities can leverage

advanced cloud analytics to build and strengthen their customer relationships – while

simultaneously working to build a more resilient digital grid.

Just as Amazon makes use of consumer insights to create new, highly valued oferings for its customers, next-generation electric utilities can likewise transform themselves into digital

organizations that rely on advanced cloud analytics to learn far more about their customers

than they ever could before, and then tailor services to improve their customers’ lives.


Embracing The Cloud As The

Right Tool For The Right Job

Leveraging An Agile Platform To

Embrace The Internet Of Things

Developing The Amazon Efect Of Customer Expectations

Tapping Smart Buildings To

Transform Customer Relationships

Accelerating

Innovation

The convergence of digitalization and decentralization provides an opportunity for utilities to

tap into the capabilities of machine learning and artiicial intelligence to build upon their role as a 24/7 core service provider in people’s lives. Unlike past transformations in the utility industry,

redeining the customer experience through cloud analytics can start to bear fruit in months, rather than years.

For some of the largest utilities around the world, such as Centrica, Enel and Paciic Gas & Electric, the journey to the cloud is already well underway. But there is ample opportunity for

utilities of all sizes and under all regulatory frameworks. For energy providers that have not

yet mapped out a transformative customer experience, now is the time to embrace an agile

platform and chart a course.

Making the most of the cloud requires much more than just a technology change; it requires

evolving processes and transforming the business culture.

This paper explains how organizations can beneit from a partnership with Amazon Web Services by:

The convergence of digitalization and decentralization provides an opportunity for utilities to tap into the capabilities of machine learning and artiicial intelligence to build upon their role as a 24/7 core service provider in people’s lives.


The push to digitize the electric power sector is accelerating at a remarkable pace. As

decentralization and decarbonization converge in the form of distributed energy resources at an

increasing clip, there is a clear need for faster digital transformation among electric utilities to

unlock the potential of the connected energy customer.

Introduction: The Digital Transformation

1


U.S. utilities’ investments in technologies such as advanced metering infrastructure, distributed energy resource management systems and advanced distribution management systems are expected to total

$110 billion over the next decade

2017 2021 2023 2026

By 2023, voice-assistant devices, smart thermostats and connected lighting are expected to grow to a cumulative

$24 billionSource: Wood Mackenzie Power & Renewables

Source: Northeast Group research

Source: Navigant Research

4

20

Global smart grid cybersecurity spending is poised to nearly double from 2017 to 2026,

reach $3.2 billion

Wood Mackenzie Power & Renewables estimates

The customer utility analytics market will reach

$20 billion in the U.S. in 2021up from $4 billion in 2017.


Decentralization

Digitalization

Source: AWS

Decarbonization

Three Trends Driving The Energy Transformation

There is ample opportunity for utilities to serve customers with robust oferings within any regulatory framework, all while crafting services that also boost grid reliability and

operational eiciency.

Customers of all types are now used to sophisticated and digitally native interactions with

most brands they do business with on a daily basis, such as banks and airlines, but that is often

lacking with utilities. It is not enough simply to update the utility experience; rather, the utility

experience must strive to match how customers large and small interact with other providers in

their lives. The traditional utility call center and rudimentary company website are not going to

satisfy today’s customers.

A New Customer Paradigm

It is possible to quickly and efectively transform the utility customer experience to keep pace with consumers who now have more options than ever before in energy supply and services – as

well as higher expectations.

For instance, the smart home is an increasing reality

for American consumers, especially as they embrace

smart speakers like Amazon’s Echo as the hub of

the smart home. As Amazon Alexa voice-enabled

devices get even smarter, for example, utilities have an

opportunity to enter into a new customer experience

paradigm without having to build that model from

the ground up.

In recent years, utilities have been monitoring these

smart home developments, and some have dipped a

toe in the water with oferings such as bring-your-own-thermostat demand response programs. But simply

watching smart home evolution from afar and choosing

one-of technologies for demand-side programs is no longer enough as DERs proliferate. Utilities must ind a cost-efective way to innovate more rapidly.

Consumers are becoming prosumers, a new kind of energy customer, as solar PV, storage and

electric vehicles proliferate. Furthermore, a robust, cloud-connected internet of things (IOT)

environment is unlocking opportunities for customers to tailor how diferent devices interact with each other.

To capitalize on distributed energy, voice-assisted devices and IOT, utilities can partner for

cutting-edge connected home services that pull customers closer by ofering them services and options that make it simpler and easier to interact with their homes.

At a basic level, it is the cloud that enables the transformation to a truly customer-centric digital utility.

But not all cloud services are the same. Amazon Web Services (AWS) can:

• Save money through right-sizing cloud storage and computation power and slashing

provisioning lead time

• Accelerate adoption of DERs for customers and utilities using IOT data analytics

• Deliver the customer-service experience of the future with Amazon Connect

• Help engage home/small businesses at scale with voice-enabled utility services

• Innovate at the speed of the market while meeting regulatory and security requirements



Cloud: The Right Tool for the Right Job

2

In 2016, Enel, a global utility with more than 60 million customers, was bumping up against

renewal decisions for contracted data center storage. Enel’s top executives resolved to take to

the cloud. They saw digitalization not just as an ambition, but rather as a necessity.

Enel moved more than 10,000 servers in 30 countries to the cloud in nine months. The company’s

embrace of the Amazon Web Services platform led to a decline in provisioning lead time to two

days, down from nearly a month. Through the AWS partnership, Enel would also realize storage cost

savings of up 60 percent in addition to computational power savings of more than 20 percent.

Enel’s embrace of cloud provides beneits far beyond right-sizing virtual storage. Enel X, the company’s new solutions group, envisions a platform that everyone can use to transform energy into

services. The utility wants to anticipate its customers’ needs rather than simply keep the lights on.

The utility can now call up web servers at a moment’s notice for new websites to support rapid

prototyping, which opens the door for innovation at previously unattainable speed and scale. While

the upfront savings were one compelling selling point, for Enel, the real beneit is the increased productivity attained by turning all of its applications over to the cloud. By the end of 2018, it will

have shed all of its data centers and mainframes to be entirely cloud-native.

Enel saw digitalization not just as an ambition, but rather as a necessity.


The cloud lexibility allows Enel to innovate for its customers more rapidly than ever before – and to think beyond energy. Not only can Enel X provide support for home energy appliances and e-mobility applications, but it also provides power lexibility services for commercial customers and even wholesale iber optic services.

Legacy Integration Is Possible

Accenture found that 95 percent of millennials say they’d switch energy providers altogether if their energy provider proves unable to provide a seamless experience.

Most utilities are no longer the purely analog businesses they were a few decades ago, but they

are also still far from becoming a digital, cloud-native utility like Enel. But increasingly, today’s

consumers – especially millennials, the largest generational cohort in the history of the U.S. –

are unlikely to stay with companies that rely on legacy systems to provide services.

Customers of all ages need to be able to grasp the tangible beneits that come from integrating legacy systems with today’s cloud capabilities, such as proactive alerts about outage restoration

time during blackouts or sophisticated bill analysis that tells customers which distributed energy

options make the most sense for them.

As Enel is proving with its full migration to cloud, even legacy systems can be migrated, although

utilities often require a trusted partner to carefully migrate critical operations to the cloud.

AWS and AWS partners have been successfully integrating and migrating utilities’ systems and

data to the cloud for years. Among the strategies AWS uses to address these problems are

data lake campaigns wherein relational data from business applications can be combined with

non-relational data from connected devices, for instance, setting the table for analytics and

machine learning. There is also AWS Database Migration Service that enables utilities to merge

heterogenous databases into diferent platforms.

Utilities can leverage these strategies to open up previously diicult-to-combine datasets, from SCADA to customer information systems to workforce management. The upfront beneits for customers can be more seamless service calls, fewer outages and a service provider that is

maximizing its existing infrastructure, which may translate into lower bills.


As legacy systems move to the cloud and billions

of connected devices hook up to the grid, the issue

of security grows even more complex in today’s

increasingly digitized power sector. Global smart grid cybersecurity expenditures are forecast to hit

$3.2 billion by 2026, up from an estimated $1.7

billion in 2017, according to Navigant Research.

AWS enables customers in highly regulated

industries, such as global inancial service entities and the public sector, to improve their security

posture while complying with cybersecurity

regulations – all without compromising the agility

needed to scale their business.

When it comes to the North American Electric

Reliability Corporation’s requirements, AWS

partners can rely on a security infrastructure that

gives them ownership and control over their content through simple, powerful tools that allow

them to determine where their content will be stored, secure their content in transit and at rest,

and manage their access to AWS services and resources for their users.

For example, Talen Energy improved its security posture by using AWS cloud infrastructure

protection services to help meet regulations. A key factor in the company’s selection of AWS was

the lexibility to manage encryption keys for access to the highly sensitive data that is produced in the operation of its nuclear power plant.

Talen stakeholders commented that the newfound lexibility of a rapidly scalable and secure virtual technology footprint helped make the decision to go with AWS especially attractive –

particularly given the luid nature of companies operating as independent power producers and the backing of experts working in AWS Professional Services.

Connected Can Be Secure

Customers can also receive a truly personalized experience and oferings that are speciic not only to their household usage proile, but also to their neighborhood feeder, providing not only beneicial personal recommendations, but also community-based ones.


The Amazon Efect of Customer Expectations

3

Migrating legacy systems to the cloud is just one step

in a customer-centric digital journey. Electric utilities

have a far more dramatic transformation ahead

of them when it comes to customer relationships

compared to providers of other services, such as

retailers. Although utilities are providing a critical

service, that doesn’t mean they cannot leverage the

lessons of the world’s most innovative brands.

Even with the limited amount of time customers do

interact with their energy providers, it’s not necessarily

a pleasant experience. Investment irm Energy Impact Partners, which is funded primarily by utilities, has

found that approximately 85 percent of customer-

utility interactions are driven by complaints about

outages or billing issues.

But it doesn’t have to be this way.

The speed and agility of running IOT analytics in the cloud can streamline operations and put

more people to work on executing a new customer engagement paradigm.

In this new paradigm, the traditional utility customer segments can be broken down into

hyper-speciic microsegments, which can then be targeted with tailored services and products designed to meet their tendencies and desires. It can meet customers where they are, which is

increasingly on digital platforms and on mobile.

85% of customer-utility interactions are driven by complaints about outages or billing issues.


The marriage of AI with voice services will also enable signiicant advances in utility customer-centricity initiatives.

The interface, and others like it, are capable of cross-selling or upselling customers on products

and service oferings. And if the AI cannot resolve a customer query, it can connect customers to a live call center representative or schedule a callback. Closing the loop, the platform

automatically follows up with customers via text to gauge their sentiment after interactions.

Beyond the obvious bottom-line implications of delecting call volumes from human-stafed call centers, utilities leveraging AI-powered cognitive care can also reap new revenue opportunities by

automating a virtual sales force – and measure progress in improving customers’ experiences.

The good news is that meeting customers where they are has never been easier thanks to

artiicial intelligence (AI) and machine learning (ML), which are now commonplace across digital platforms. Whether customers are full-ledged prosumers with solar-plus-storage systems installed or simply have an Echo device in the home, new touchpoints abound.

For example, new startups like OVO Energy have used ML to enable two-way energy lows for vehicle-to-grid applications in Europe, where the company’s V2G charger dispenses energy back to the grid at peak times to the beneit of customers’ pocketbooks and boost grid reliability, while another application uses AI to charge EVs in of-peak periods to save customers money.

Beyond AI applications that leverage data sets from existing grid infrastructure to foster services

like load control, dynamic pricing and alerts tied to peak periods and billing, the marriage of AI

with voice services will also enable signiicant advances in utility customer-centricity initiatives.

Cognitive customer care technology combined with Amazon Connect can automate customer

support centers. For example, cognitive care platform Wysdom can understand more than

240,000 questions and statements to which it can respond and dispense relevant answers and

information, such as on billing inquiries.

Machine Learning and Voice Are the Future


For example, utilities could bring together more

sophisticated billing capabilities with Alexa and

customers’ rooftop solar arrays, EVs and energy storage.

Customers living in smart homes might ask, “Alexa, what caused my bill to go up last month?” while those

with rooftop solar might ask, “Alexa, how many energy credits have I generated this month?” It is a far cry

from the Accenture inding that customers interact with their utilities an average of 8 minutes per year.

US Voice-Enabled Digital Assistant Users, by Generation, 2016-2019

Note: individuals who use voice-enabled digital assistants at least once a month on any device; millennials are individuals born between 1981-2000, Gen X are individuals born between 1965-1980 and baby boomers are individuals born between 1945-1964. Source: emarketer.com

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29.9

35.839.3

13.415.6 16.7 17.2

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Millennials Gen X Baby boomers

Utilities do not have to work alone to reimagine the customer experience as they shift to

the cloud. AWS works in concert with its customers to teach them iterative development

methodologies through programs like digital innovation workshops. Utilities can also leverage

Amazon’s methodology of putting the customer irst when designing new services and oferings, and then working backward from that starting point. It forces companies to think about whether the approach they’re envisioning even makes sense for their customers – and it’s

a page torn straight from Amazon’s intensely customer-centric playbook.


An Agile Platform to Embrace IOT

4

Beyond voice-assisted devices, the emergence of IOT allows utilities to leverage cutting-edge

technology to transform more rapidly than ever before to meet customers where they are today.

For example, DER planning assessments not conducted in the cloud can take weeks or even

months. But with IOT analytics in the cloud, utilities can execute assessments for DER planning

in increments that are measured in minutes, hours and days, opening up far more dynamic

opportunities for customer services.

On a platform such as AWS, power producers and electric utilities have a virtual corral in which

they can contain the physical and digital pieces of the puzzle and get to work putting them

together faster than ever before. When complete, that puzzle has customers at the center

of a new electric grid characterized not by a linear progression that begins with dispatchable

generation, but rather by a network of networks that can make transactive energy possible.

Tools available within the AWS platform allow energy providers to rapidly and reliably develop,

test, tweak and deploy new products and services to capitalize on what customers want – not just

what they need – all while more seamlessly meeting regulatory requirements.

On a platform such as AWS, power producers and electric utilities have a virtual corral in which they can contain the physical and digital pieces of the puzzle.


Today’s Power Market Tomorrow’s Power Market

Source: Wood Mackenzie Power & Renewables

Electric Vehicles

ConnectedDevices

Demand Side Management

Intermittent Generation

Energy Storage

Advanced Metering Infrastructure

Distributed Generation

Dispatchable Generation

Transmission

Distribution

End Customers

Dispatchable Generation

Transmission

Distribution End Customers

For example, utilities in more than 30 states have to ile integrated resource plans (IRPs) that increasingly incorporate DER integration, but the assumptions going into IRP development are

often outdated by the time the plans are assessed by regulators. That means the plans may

have to be reiled, but more importantly, customers may not be ofered the lowest-cost and best options in a timely manner because DER planning is not as dynamic as it should be.

Whether working with an AWS partner or developing applications in-house, utilities can:

• Enable more distributed energy by developing distribution-level hosting capacity analyses that

can enable faster interconnection and identify feeders best suited for distributed energy.

• Increase customer segmentation that allows for cost-saving opportunities for customers to

take part in time-of-use programs, energy eiciency and demand-side management programs that align with their usage proiles.

• Develop more reined IRP processes that align planning horizons and models for transmission, generation and distribution systems.


A Diferent Kind of Service Provider

5

In the past two years, the number of connected homes in the U.S. increased to 29 million

from 17 million, according to McKinsey. More than half of U.S. households are expected to

have a smart speaker like Amazon’s Echo in the home within the next ive years. Most of those homes have invested in the smart home through online and big-box retailers as well as

service providers, and utilities so far are not part a meaningful part of the equation.

As utilities begin leveraging the capabilities of adaptive analytics and smart home

technology to improve customers’ experiences, it will be important to make their appeal

as broad as possible: The experience has to be simple and intuitive, it needs to be part of

a wider-reaching strategy around a connected home/building, and providers must defer to

automated features whenever possible.

The number of connected homes in the U.S. increased to 29 million from 17 million.


In the U.S., Duke Energy has already started on that journey by ofering a Duke Energy Smart Home Bundle that includes an Echo Dot, smart lights and a smart thermostat and hub. One

early adopter of the bundle said in his Amazon review, “Installation was fast and the guy that

installed it was very knowledgeable about the product. I have enjoyed it more than I thought

I would. Everything works perfectly and the temperature in my house is comfortable 100% of

the time now without me ever having to adjust the thermostat.”

The oferings don’t just need to geared toward the tech-savvy. Duke is also part of Charlotte’s North End Smart District program, which ofers smart home technology, including an Echo Dot, to help residents control energy bills, and some participants have never used smart home

technology and have a higher-than-average energy burden.

Although the utility can design the program, Amazon’s smart home experts are available in

select U.S. cities and regions to do the heavy lifting of home visits and assessments and making

personalized recommendations for customers; they take care of the installation and train

customers on how to use the devices.

Additionally, six in 10 energy customers surveyed by Accenture value comfort and the

convenience of automation. Despite their relatively cumbersome bureaucratic structures

and reputation for lacking advanced technology, utilities hold an advantage over would-

be disruptors and new market entrants: They’re already in the home, are set up for 24/7

operations, and are well-known brands amongst their customers. Add-on revenue streams

stemming from home security and other critical monitoring services are possible additional

oferings once the smart home beachhead is well established.

That’s why the time is now to become a diferent type of service provider. Utilities can create their own products, or leverage or white-label Amazon’s virtual product and service oferings, giving them a host of new avenues to create ownership of the smart home transition,

establish new bonds with customers and become a driver of smart home automation with a

layer of next-generation energy services woven seamlessly into the ofering. In Europe, for instance, Centrica has branded its smart home solution Hive, while France’s EDF has a smart

home hub dubbed Sowee.

Six in 10 energy customers surveyed by Accenture value comfort and the convenience of automation.


It is not just homeowners who can beneit from customer-centric connected services. Success in demand-side management programs for large C&I customers and residential customers can in part be chalked up to dedicated account managers and mass marketing, respectively.

In the middle of those two rate classes lies small and medium-sized businesses (SMBs), a far more

fragmented and underrepresented segment when it comes to enrollment in programs such as

demand response. In California, for example, a 2016 study commissioned by Paciic Gas & Electric found that even though SMBs constitute 78 percent of the utility’s customers, they account for

only 32 percent of the energy savings resulting from energy eiciency programs. There is also opportunity for load deferral options that are not available to typical residential customers.

Embracing customer-centricity is one key to unlocking the demand potential among the luid ranks of small-business customers. Utilities can leverage data analytics to identify SMB customers

with the greatest savings potential and, most importantly, provide a simple and seamless

experience for them to participate in eiciency or demand response programs.

For instance, all new Lennar homes come with a smart home package delivered by Amazon.

With smart home technology deployed at scale, new demand-response opportunities are

unlocked where perhaps they weren’t before, and utilities gain access to heaps of data they may

not previously have had access to, all while establishing a stronger customer bond.

Unlocking Small Business Potential


Redeining success with customers of all categories can only come by taking advantage of continuing advances in AI and ML to integrate legacy systems and better harness multiplying

the data streams lowing from customers and utility operations. Integrating data sets is critical to unlocking potential new customer services and making the case to regulators to be

allowed to innovate.

Accelerating Innovation6


Once the data has been harnessed in the cloud, utility leadership teams must engage in

and promulgate a culture of innovation to meet customers where they are today with truly

innovative energy options that make consumers’ lives simpler and better. Building up a

formal mentorship program to foster such a culture is an efective way to assess buy-in and provide employees with a sense of ownership of the cultural renaissance as they rethink their

role as a service provider.

It’s also critical for utility leaders to look beyond their internal capabilities and engage

partners already adept at cloud-native solutions. Beyond the in-house expertise at AWS,

the AWS Partner Network is rife with leading cloud platform and technology innovators

from which power companies can draw expertise and insight on their quest to transform

themselves and their customers’ experiences.

AWS has more than 1,400 services and features and is investing heavily in machine learning

and artiicial intelligence. In 2017 alone, Amazon made more than $10 billion in capital expenditures, the majority of which went to AWS to continue to build on its capabilities.

Whether it’s integrating automated chatbots and voice services into customer service

oferings, or running AI to provide predictive maintenance that creates value for the utility and therefore its customers, the options to boost the customer experience through AI and ML are

virtually limitless if there is buy-in from enough people across the organization to innovate.

For instance, PG&E leadership instituted a cloud mentorship program to ensure its employees can claim ownership of the California utility’s commitment to a cloud-irst strategy, which was kicked of in 2018. A band of change agents within the utility embarked on AWS certiications to usher cloud-conscious employees on the journey with them. That means innovation does not sit in one department tasked with thinking about the utility of

the future, but rather that knowledge and expertise are spread throughout the organization.

Faster Integration Through AI/ML

AWS has more than 1,400 services and features and is investing heavily in machine learning and artiicial intelligence. In 2017 alone, Amazon made more than $10 billion in capital expenditures, the majority of which went to AWS to continue to build on its capabilities.


Massive innovation is within reach for utilities large and small that are ready to tackle the

opportunity. The capabilities of advanced cloud analytics, combined with robust IOT services,

voice-enabled services and powerful AI/ML make innovating and scaling possible at a

faster pace than many ever thought possible. More importantly, this transformation can be

accomplished within a demonstrably secure environment.

The culture of innovation that has vaulted Amazon to world renown can stoke innovation within

utilities too. Utilities that opt not to leverage the latest tools and embrace an intense customer

focus may ind that customers will take their business elsewhere, as many have choices today that didn’t exist even a decade ago.

From its array of proven methodologies to the opportunity to consult with some of the biggest

names in AI and predictive analytics, AWS ofers the resources that utilities can use to unlock an entirely new customer paradigm, and therefore new business opportunities.

The roadmap toward a customer-centric business should include:

• Always starting with the customer in mind for every initiative and then work backward.

• Committing to business process change and cultural change as part of a comprehensive

cloud strategy.

• Identifying partners and experts that can accelerate the timeline for innovation, while also

supporting the buildup of in-house expertise.

• Understanding how innovation and security can go hand-in-hand with cloud services and

designing an architecture that can maximize both.

• As part of business change, applying proven programs, such as the AWS Cloud Adoption

Framework, to build a comprehensive cloud migration plan across the entire organization.

• As part of cultural change, bringing together people from disparate teams – such as

customer service, IT and OT – to build new DevOps teams (while also respecting the “two

pizza” rule: Teams shouldn’t be bigger than two pizzas can feed)

• Engaging the C-suite and having at least one champion to help push the project forward

and break down silos in the organization.

• Breaking data sets out of silos so they can be integrated and leveraged by machine

learning applications.

• Capitalizing on the utility’s position as the incumbent service provider.

Conclusion7


Enabling the Connected Energy Customer Through Cloud and Voice Services

Copyright © 2018 Greentech Media Inc.,

A Wood Mackenzie Business, All Rights Reserved.

AWS gives power and utility companies the foundation to focus on delivering the best

customer experience and achieve operational and cost eiciencies while meeting demand securely and reliably; the lexibility to evolve their business model and innovate in a rapidly changing industry; and the critical business insights to transform the industry.

Visit us at aws.amazon.com/power-and-utilities to learn more.

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WHITEPAPER Enabling the Connected Energy Customer Through ... · tap into the capabilities of machine learning and artiicial intelligence to build upon their role as a 24/7 core service