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How energy bosses are underestimating the potential of intelligent automation

The global energy and utilities sector is embracing the use of intelligent automation, particularly artificial intelligence – but executives are still underestimating its full potential.

That’s the verdict of the Capgemini Research Institute, which surveyed more than 500 energy business bosses and found that nearly half of them have under-estimated the benefits they derived from their intelligent automation initiatives, while only 18 per cent are deploying quick-win use cases.

And just 15 per cent of those surveyed said their company is deploying multiple intelligent automation use cases at scale.

“Having tasted the benefits of automation, energy and utility companies must now redouble their investment to reap the full rewards,” said Philippe Vié, Global Head of Energy & Utilities at Capgemini.

A report based on the survey results highlights that the traditional energy and utilities business model is under pressure worldwide, with technological changes and increased competition making their presence felt. It cites that automation and AI will also be instrumental in helping these companies to meet climate change goals and the growing demand for clean, cheap, reliable energy.

The report also shows significant regional and sub-sector disparities in the scaling of automation. In the US, 23 per cent of energy and utility companies have deployed intelligent automation initiatives widely at scale, as have 16 per cent in both France and India, compared to just 8 per cent in the UK.

Capgemini says that while the sector is deriving significant value from intelligent automation compared to other industries, “scaling, seizing quick-wins and overcoming the critical digital skills gap will be key to bringing it into the mainstream”.

Philippe Vié said that the energy and utilities sector “is already seeing the difference that intelligent automation can make in improving business efficiency, customer satisfaction, and revenue. Executives are quite rightly making the deployment of automation one of their top priorities.”

However, he added that the focus must now “shift to the factors that will enable the scaling of multiple use cases including an investment in specialist talent, more integrated co-ordination between business units, and a stronger commitment from leadership.”

The study surveyed 529 leaders at manager level or above in energy and utility companies based in the US, Germany, India, the UK, France, Netherlands and Sweden. It found that the sector is already seeing significant value from automation, in terms of boosting operations, topline growth and engaging customers, compared to other industries. A consistently higher percentage of executives in the energy and utilities sector said they’d achieved benefits from their intelligent automation initiatives compared to the response for ‘all sectors’.

Abhijeet Bhandare, Chief Automation Officer at GE Power, explains. “We have a very clear filtering criteria defined for automation use cases. We have close to 200 automation ideas in the pipeline, and on average about 50 per cent to 60 per cent of them will be rejected. It is important to focus your attention on the remaining 50 per cent, as they will give you the most value. And you must have the right criteria – whether it is value, efficiencies, cost savings or the opportunity cost. Organizations should focus on quality over quantity of use cases.”

In core functions, Capgemini found that only 18 per cent of energy and utility organizations are deploying quick-win use cases – those that are low on delivery complexity but high in terms of benefits achieved, such as forecasting, energy trading, yield optimization, grid behavior interfaces and complaints management. Instead, just over a third of the energy and utility organizations are focusing their efforts on use cases that are easy to implement but which have a low-benefit upside.

And while overall adoption of AI has matured in the sector, with 52 per cent of respondents having deployed a number of use cases, only 15 per cent of executives said their company was deploying multiple intelligent automation use cases at scale.

Business-related challenges were cited by respondents as barriers to scaling, including a lack of co-ordination across different business units, a lack of leadership commitment, and an organizational reticence to experimenting with technology that could replace human workers.

Many executives also pointed to a shortage in skills as a challenge. Some 55 per cent cited a lack of talent skilled in automation technologies, with 47 per cent identifying limited efforts to reskill employees, 42 per cent the difficulty of retaining employees with the right skills, and 41 per cent  employee resistance to learning new skills.

Click here to access the full report
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The use of digital technologies in the energy sector will be explored in detail at POWERGEN Europe and European Utility Week – where Capgemini will be exhibiting and speaking – in Paris in November. Click here for details.