{"id":8249,"date":"2018-04-27T14:00:09","date_gmt":"2018-04-27T18:00:09","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/florida-power-and-light-disrupted-by-data\/"},"modified":"2018-04-27T14:00:09","modified_gmt":"2018-04-27T18:00:09","slug":"florida-power-and-light-disrupted-by-data","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/florida-power-and-light-disrupted-by-data\/","title":{"rendered":"Florida Power and Light: Disrupted by Data"},"content":{"rendered":"

Florida Power and Light (FPL) is the largest utility in Florida. FPL, along with the entire utility industry, is at the brink of disruption as the energy industry transforms at an unprecedented pace, driven by technology, data, and the internet.<\/p>\n

FPL is a vertically integrated, regulated monopoly that generates and delivers electricity to its customers. Historically FPL\u2019s core business has been generating, distributing, and selling electricity with large assets. Utilities invest in these capital-intensive, large generating assets, and were historically guaranteed a healthy rate of return through electricity customer payments that were set by regulators. However, this business model is threatened by concurrent waves of technology-driven change in the energy industry. The primary disruptions are provided below:<\/p>\n

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  1. New distributed energy resources (solar, storage) that make the grid more difficult to optimize and reduce customer reliance on FPL (and thus reduce revenue)<\/li>\n
  2. Home energy management platforms, energy IoT, and \u201cenergy internet\u201d create data management complexities and also encourage reduces customer dependence on FPL.<\/li>\n
  3. Challenges handling bi-direction flow of electricity as solar panel owners try to push their energy back on to the grid.<\/li>\n
  4. Proliferation of electric vehicles change the grid load and make it more difficult to manage<\/li>\n<\/ol>\n

    \"\"<\/a><\/p>\n

    With the \u201cinternet of energy,\u201d a term created to describe the data-drive technological advancements in the utility industry, the electricity infrastructure is more complex and dynamic with multi-directional flows and millions of data points. The grid is becoming more difficult for the utility to manage, and the data flow is becoming equally as important as the electron flow in achieving more efficient and resilient electricity grids. These technological advancements are also opening FPL\u2019s service territory to third parties who are stealing market share from FPL\u2019s monopoly. The \u201cperformance defining component\u201d of the electricity grid is shifting from hardware to software, and utilities might not be equipped to win in this arena.<\/p>\n

    However, there is still a question about who is best suited for long-term management and ownership or new energy assets in the rapidly evolving ecosystem. There is no clear 3rd<\/sup> party winner yet. According to Bloomberg research, utilities and energy companies in the sector are investing $590 billion into digital initiatives between 2017 and 2025, equivalent to one fifth of all their projected capital investments. FPL embraces this as an opportunity, rather than a threat, there is a huge opportunity for FPL to become utility of the future. If FPL fails to act they could see their revenues decline as customers no longer need to rely on them for grid power.<\/p>\n

    Organizational Challenges<\/u><\/p>\n