Power generation company revenues rely on asset management.
These revenues are maximized not only by providing reliable power to customers, but also from shrewd management of a utility’s commercial operations. Too often those in charge of asset management and those that handle the commercial side, sit in silos.
Fortunately, modern asset management tools make it possible to strengthen partnerships across the organization by providing a “single pane of glass” from which both sides can view what is happening. With greater communication comes greater insight and better decision-making to drive revenue.
Among the many challenges facing electrical utilities, the disconnect between the asset management team and the commercial (planning and trading) teams is quite common.
Asset managers focus on keeping utility assets in optimal health for the best performance given budget constraints whilst the trading team wants to most profitably sell the electricity generated. Yet, without synergy between the two, decisions are made in relative vacuum.
For one, decisions about asset maintenance are dictated typically based on a time/ usage schedule or based on its current condition. Say a transformer hasn’t been serviced for 18 months and is now due for maintenance. Taking the transformer offline based on this timing in isolation, without taking into consideration the profits lost from lowered productivity at peak pricing periods leaves a utility in a less than optimal position.
Without comprehensive insight into market price or demand forecasts, the asset manager makes an isolated decision that could result in commercial underperformance.
Meanwhile, the planning and trading team is reviewing its own data and spreadsheets to predict market price trends. In making short-term or medium-term trading decisions, the electricity traders take into account asset maintenance plans. Yet they have no say in the time-based conditions, so the best they can do is schedule and optimise around the asset managers’ plans.
The obvious solution is to let both partners share spreadsheets and database applications that help determine price and demand forecast or understand transmission constraints and so on. That used to be easier said than done.
Fostering Partnerships within Utilities through Digital Enablement
With Lumada solutions, the utility can build a platform to get all the information insights that traditionally reside within siloed systems in one place. The trading team can know and understand what the asset managers are doing and why. Asset managers can also move to predictive maintenance and schedule work on an asset for a time when market prices are predicted to be lower.
This kind of collaborative asset intelligence is all the more important for utilities today, especially with power generators facing added pressure to aggressively compete in the market with new energy sources and answer to customers with greater accountability - all while keeping costs down and turning a profit.
Simultaneously, the industry is only growing more complex.
Deregulation is driving utility players to adapt.
The influx of Internet of Thing (IoT) sensors is adding to the deluge of data available.
Time allotted for decision-making is also growing shorter.
All of these factors are pushing Traders to make strategic decisions at a much faster pace than ever before.
These many market changes require companies to fast-track change—if they want to stay competitive. But, there’s also good news. Thanks to ongoing innovation, such as the advances in data analytics, it’s possible to manage change effectively and efficiently.
Fast-Tracking Change at Utilities
Lumada solutions supports real-time collaborative asset intelligence across your entire utility. Meet your strategic goals by empowering your teams with a holistic overview and the ability to drill down into the details they need to make the best decisions. Think of it in terms of your own health. If you visit two different specialists, and they don’t discuss their treatment plans together, you could end up taking steps that aren’t going to help. Or even contradict one another! You’re not going to achieve your goal of feeling better soon!
The same is true of asset managers and traders and planners.
They could be working diligently in their own domains to do the best job and meet their specific goals. But, since they are functioning independently of one another, the decisions made may not be the best for the utility overall.
For example, the asset team may decide not to push the asset too hard to help delay maintenance. But they might do this when prices are high and the utility’s traders could benefit from the equipment running at full capacity.
For the asset manager, DE means optimised asset performance, more efficient asset operation as well as improved maintenance team safety.
Instead of unnecessarily scheduling maintenance simply to avoid failures (that put both equipment and people at risk) the asset manager can use the digital tools to make decisions based on asset condition facts and data that considers how to create a safe environment, optimise output and maintain assets all at once.
The commercial operations team, meanwhile, can make sure the utility can better:
- Make the best trading decisions
- Plan for upcoming weeks, even months
- Fulfil the obligations for amount of power committed
- Influence asset productivity to prevent profit loss
- Find ways to gain competitive advantage
Let’s be clear: there’s never going to be a shortage of data for asset managers or commercial operations to draw from. The important thing is to set up a common platform that offers a better perspective about the information.
More effective decision making is powered by data available at all times, with no time wasted waiting for another group to analyse, process, and report.
Lumada solutions offers end-to-end support so that operations can monitor and manage assets, even predict failures, while decision-makers are empowered to make more timely decisions with asset intelligence, market data and predictive analytics. With customers at 50% of the top 250 global electric utilities, we understand how to deliver on asset performance.
Minimise risk, enhance operational and financial performance, and execute the right strategies for the future with Lumada solutions. Collaborative asset intelligence will transform your asset management strategy. Learn more today!