Continuing with my series of 2018 predictions in the energy and utilities industry launched last week with prediction 1 on the rise of RenTechs, be sure to read prediction 2 on self-powering communities and prediction 3 on the role AI and robotics will play for utilities.

Prediction 2—Consumers will consider self-powering communities over traditional utilities firms

Because renewable energy is rapidly becoming more affordable, communities are starting to see the possibilities of implementing community owned and operated renewable generation facilities. We see two types of communities forming. The first are physical communities—be it cities, towns, or campuses—in which decisions to implement renewable or green energy are made by mayors, counselors or facility owners. Virtual communities, on the other hand, form peer-to-peer groups in which members can trade energy and share their energy assets in a peer-to-peer network. An example is Sonnen Energy in Germany, where citizens with rooftop solar and battery storage can join a community and sell surplus energy to each other. In another example, Nottingham City Council has set up a non-profit supplier using renewable energy to provide residents with the lowest cost power available.

Such initiatives pose an obvious threat to traditional providers since they represent a decline in revenue or sales. Traditional utilities need to recognize that these trends are occurring and make conscious decisions as to whether they’re going to participate in the marketplace.

For instance, communities interested in renewable energy projects may not want to own and manage the facilities. This represents an opportunity for traditional energy suppliers to create new business models, step in and be the Engineering, Procurement and Construction (EPC) company, and operate it for the next 20 years.

Prediction 3—Artificial Intelligence and robotics will start to restore consumer faith in utilities

In 2018, Artificial Intelligence and robotic process automation (RPA) will play an important role in helping to restore consumers’ faith in utilities. The assertion is supported by data that suggests AI and RPA are already demonstrating an impact. For instance, in the utility industry itself there is a customer expectation gap of 71%,[1] indicating that the utility industry has the worst customer experience relative to expectation of all industries. We know that three quarters of utilities have implemented AI and already see a 10% improvement in sales while 73% believe that AI and RPA will change their customer experience; 65% feel that it will not just improve customer experience but also reduce churn. The data we see today confirms that AI and RPA will have a profound effect on utilities in 2018.