Cellular technology will be critical to accelerating the digital transformation of utilities, a new report by information and communication technology provider Ericsson has revealed.

The ‘Connected Energy Utilities’ report, published in partnership with Arthur Little, shows that the utility sector can harness cellular connectivity to mitigate the increasing complexities of meeting the needs of a rapidly evolving electricity grid and consumer demand profiles.

As energy costs and demand for electricity rise, the digitalisation of the utility sector can enable providers to expand capacity, optimise use of infrastructure, increase grid reliability and boost operational efficiency through a secure and reliable network.

With demand for electricity expected to rise at a compound annual growth rate of 2% over the next two decades, largely driven by industrial motors, space cooling, appliances and electric vehicles, utility providers need to make investments in new technologies to meet this demand and best serve consumers.

In addition to growing demand and an ever-evolving mix of energy sources, the report further highlights growing challenges in cost control and cybersecurity, as well as changes in the energy value chain.

“As renewable-energy sources continue to become more available and viable, consumers are becoming ‘prosumers’, feeding energy back into the grid, through solutions such as residential rooftop solar photovoltaic, while simultaneously consuming it, shifting the value chain from traditional one-way electricity flow to being circular in nature,” the report says.

The ‘Connected Energy Utilities’ report indicates that fourth-generation and long-term evolution technologies, in particular, will be critical to handling the bidirectional energy flow from prosumers and increased fluctuations in power production stemming from renewable-energy sources, with fifth-generation connectivity expected to come into play in the future.

“Cellular connectivity is helping to accelerate the digital transformation of utilities,” says Ericsson VP and utilities head Koustuv Ghoshal.

With an up to 50-year operational lifetime of electricity infrastructure, connectivity technology will be a worthwhile investment for utilities, as it will continue to provide extensive business value for many years.

“As power generation methods expand to include renewables and the demands on transmission and distribution grids become more complex, it is vital for the utility sector to evolve along with it through continued integration of advanced cellular technology.”

The report points to several proven benefits of this technology, including internal communication support, worker safety, automation, user experience and insight-driven innovation, bringing digitalisation to the forefront of efficient business operations.

While still evolving, cellular technology already presents use cases of real-time data exchange, automatic grid fault detection, distribution automation, connected electric vehicle charging and building energy management and optimisation.