A major Spanish utility company captured €23 million in efficiencies and identified an additional €27 million in potential.
As coal and nuclear plants close, and replacement assets are being built, power and utilities companies face new urgencies when it comes to building and operating their transmission and distribution networks. In fact, the transmission and distribution business of today is vastly different from what it once was:
• Regulators are pushing networks to increase efficiency and reduce costs by using benchmarks to expose high-cost structures, reducing the allowable rates of return.
• Transmission and distribution companies have installed—or are in the process of installing—sensors, controls, automation equipment, and other advanced digital technologies that allow them to detect and respond more readily to changing conditions on the network, whether it is a surge in electric demand, an outage, the loss of a generator, or the deteriorating performance of transformers or capacitor banks.
• The rise of DERs has scrambled longstanding cost-of-service principles.
• Customer expectations continue to increase and are pushing network organizations to work more effectively to increase reliability.
Succeeding in today’s digitized transmission and distribution business requires not just new hardware and software but—more important—new thinking, strategies, and capabilities. We call this approach “asset management 4.0.” While other sectors, such as aviation, are very advanced in their asset management approach, it is now an imperative for transmission and distribution companies to evolve in this area.
BCG partnered with a large Spanish utility with the goal of transforming the company's asset management practices. We developed and implemented machine-learning predictive models to optimize asset maintenance, digitized field documentation to centralize operating-expenditure decision-making, automated the prioritization process for capital-expenditure investments based on profitability and criticality.