Energy Sector Yet to Realise the Full Potential of Intelligent Automation

The global energy and utilities sector is making increasing use of intelligent automation, including a significant rise in the use of Artificial Intelligence (AI) since 2017, but executives are underestimating its full potential with large scale projects taking a back seat, according to new research from the Capgemini Research Institute.

The report 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. However, nearly half of respondents that were surveyed have under-estimated the benefits they derived from their intelligent automation initiatives, while only 18% of organizations are deploying quick-win use cases, and just 15% of those surveyed said their company is deploying multiple intelligent automation use cases at scale.

The report also shows significant regional and sub-sector disparities in the scaling of automation:

• In the United States, 23% of energy and utility companies have deployed intelligent automation initiatives widely at scale, as have 16% in both France and India, compared to just 8% in the UK.
• Meanwhile, a fifth (20%) of oil and gas executives reported multiple use cases at scale, compared to just 6% from water companies.

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.

Key findings of the study, which surveyed 529 leaders at manager level or above in energy and utility companies, include:

i. Intelligent automation is delivering significant benefits to the sector:

The report finds 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’.

In terms of the benefits, 47% have underestimated the cost savings, 48% the customer satisfaction, and 45% the impact on net and incremental revenue.

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

ii. 80% of organizations are missing out on quick wins for critical use cases:

In core functions, only 18% 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 optimisation, grid behaviour interfaces and complaints management). Instead, just over a third of the energy and utility organizations (38%) are focusing their efforts on use cases that are easy to implement but which have a low-benefit upside.