Disruption is shaking things up across many industries, and utilities is one of them. To keep their customers, utility providers have to get creative.
For Tenaga Nasional Berhad (TNB), Malaysia’s sole utility provider, to “stay relevant, we need to be innovative,” Fauzan Mohamad, General Manager, Department of Innovation, ICT Division at TNB, tells GovInsider on the sidelines of the Asian Utility Week conference.
And one way he’s doing this is by using drones to monitor TNB’s transmission lines across the country. Below, Mohamad shares more on how TNB cut costs and manpower by using drones; the provider’s focus on innovation; and plans to go international.
Eye in the sky
Previously, TNB would fly helicopters over transmission lines to monitor their condition—looking for encroaching trees or other potential problems, says Mohamad. “The quality of the end product was not that good, and you have to sit down the whole day to look at the videos,” he notes. “It’s time-consuming and not that efficient a process.”
There’s also the high cost of hiring helicopters to contend with, and the considerable human effort involved in overcoming limited road access to remote locations.
Last year, Mohamad’s division introduced drones to monitor the power grid. The fleet of 70, which come equipped with high-quality cameras, can “automatically capture” coordinates of the areas that potentially will be having problems or issues, and also carry out tower inspections, Mohamad says.
Since the drone service was introduced last December, TNB has saved RM1 million (~US$233,590), Mohamad says. Turnaround time has been reduced by half, and less manpower is needed to carry out visual inspections and monitoring. This partnership with Aerodyne Geospatial Sdn Bhd earned TNB the Best Digital Transformation Project at the AUW conference.
Following the success of the drones, Mohamad’s team is exploring other new technologies to tackle various “pain points”. His team recently ran a proof-of-concept of a smart substation in Rawang, Selangor, which uses big data to reduce theft of infrastructure like transformers or copper. “We are now in the second phase of implementation, whereby we are expanding the coverage further to cover the whole peninsula,” he says.
Mohamad’s team is also looking into using augmented reality in a mobile app to engage customers. “We are introducing a new, fun way of reading your bill,” he says. “Normally people don’t quite understand the way the bill’s being rendered. So we developed an app, you scan the bill, there’s a lot of information coming out from there.” The app is in the prototyping stage, and Mohamad hopes to launch it by the end of this year.
Blockchain is another area of interest, according to Mohamad. “We are actually identifying the use case for blockchain. Just last week we had a workshop for business owners on what would be the potential adoption,” he shares.
Need for innovation
Focusing on customer satisfaction takes on particular significance today, as there is the possibility of TNB facing competition from other utility providers in the future. “Sooner or later we are talking about deregulation. Ministry’s talking about it for quite some time,” Mohamad says. One only needs to look at Japan’s market deregulation in 2016, and how it brought “a lot of problems”, he adds.
The Department of Innovation, created in end 2015, was one of the first steps in a “massive transformation exercise” that is happening company-wide, according to him. “There’s a need for us to have a dedicated department just to focus solely on doing innovation,” he says. Essentially, TNB wants to “restrategise, restructure ourselves to be more focused, innovative, and efficient in providing services to our customers”.
There are two main objectives to setting up the department: inculcating an innovative culture among TNB’s staff, and “delighting the customer” with new products and services. TNB serves approximately 8.6 million people in Peninsular Malaysia, Sabah and Labuan.
Part of staying relevant and creating new products and services is working with startups. To that end, TNB is working closely with MaGIC, a Malaysian government agency that runs startup accelerator programmes. “We have conducted a startup boot camp; we have hosted a few pitching sessions for the startups,” Mohamad says. “We want to be seen as startup-friendly.”
“We want to be seen as startup-friendly.”
Beyond Malaysia’s shores
The traditional utility model is “fast receding”, according to Mohamad. “There’s a term that we coin, ‘eroding of kilowatt hours’. People are becoming more green. They generate their own electricity, they go with solar,” he says.
In the face of these changing times, TNB is exploring the idea of franchising its business model to emerging economies. “Apart from doing this traditional utility business, TNB started venturing international,” Mohamad explains. Since last year, a dedicated, newly-created unit for international ventures has “aggressively” gone into countries like India, Pakistan, and Turkey. It has also invested in a utility provider in the UK. TNB is now setting its sights on Indonesia, he adds.
New products will be the backbone of TNB’s international activities, Mohamad believes. “We realised this, that our revenue should be more on non-regulated revenue earning. We need to start to look at this innovative business model whereby at the end of the day, somehow the product can be commercialised and become revenue.”
As the drones fly overhead, keeping an eye on Malaysia’s power grid, it is up to the country’s national electricity supplier to evolve in the face of disruption.