the State and Future of the Power Industry 2019
What’s Next for Utilities?
For the fourth year in a row, Navigant and Public Utilities Fortnightly have collaborated on a special report to identify key changes in the electric utility industry and to provide the guidance organizations need to navigate a successful path forward.
Through interviews with Navigant's energy consultant team and utility leaders, as well as a 8-question survey of nearly 400 industry stakeholders, The State & Future of the Power Industry discusses what’s next for utilities, identifying four major trends happening now during the global energy transformation.
DER and Renewables are the Most Disruptive Forces for Utilities
trend 1
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We hear about flat and declining demand for energy, but other forces are driving more potent disruption in the traditional utility business model.
Meet the Experts
laura
manz
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Mackinnon
Lawrence
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Nearly 60% of survey respondents said rapid increases in distributed energy resources (DER) and renewables are clearly the most disruptive force for utilities.
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60%
Broad megatrends like the electrification of transportation, optimization of smart buildings, the transition to DER, and the digitization of cities each represent dynamic growth opportunities for utilities to leverage to achieve long-term scale. Tying back to investment pathways, utilities should aim to orchestrate these infrastructure assets as networks rather than capitalize or own the assets outright.
DER is an essential part of the resource mix going forward and an important complement to the proliferation of an intermittent renewable supply. As DER proves its usefulness, important debates are underway in the policy arena such as how to promote information transparency without compromising privacy and automate control response without compromising security.
Authors:
Mackinnon
Lawrence
Jan
Vrins
Investing in sustainable energy infrastructure and solutions, taking a customer-centric approach, and developing innovative business and regulatory models are all critical paths to staying relevant to shareholders and customers in tomorrow’s energy industry.
trend 2
Climate Change Threats are Here Today for Utilities
Over two-thirds of respondents said that climate change is threatening the utility industry right now —
not tomorrow or in 10 years.
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When asked what utilities can do to respond to climate change, 55% of respondents recommended that utilities focus on developing more resilient infrastructure to help mitigate the effects of climate change and better adapt to changing conditions.
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55%
wendy
jaehn
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Focus on your customers, as their energy needs are changing rapidly. Include environment and climate risk mitigation into your strategic decision-making and day-to-day operations, as it will have far-reaching consequences for your business and the customers you serve. As your business becomes more customer-centric and sustainability-focused, it must also embrace innovation, adaptation, and transformation at scale.
karin
corfee
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At this time, it’s critical that utilities are engaged, are ready to lead the energy transition, and are helping to accelerate the decarbonization of our economy. In addition to playing a major role in helping to shape policy, utilities should take a more active role in accelerating decarbonization within their immediate control.
Meet the Experts
trend 3
Utilities Need to Invest in Current Business Models, but Also Offer New Value
Whether it’s DER and renewables or climate change, disruptive forces drive utilities to explore what’s next for their organizations, including new growth opportunities.
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69% respondents said that utilities must focus on delivering on their current business models in addition to future business models (i.e., dual-track innovation).
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69%
aida
hakirevic
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Utility customers of all classes and segments now use digital platforms to meet their daily needs—it’s not just millennials. Other sectors have already reimagined the customer experience, with companies like Uber, Netflix, Amazon, and Airbnb leveraging digital platforms and data analytics to directly impact customer relationships. Utilities will need to reach similar levels of effortless end-to-end customer experience to achieve better alignment with customers and address the four Cs: choice, control, convenience, and cost.
Meet the Expert
trend 4
Regulations and Competitors Challenge New Utility Business Models
As utilities develop new business models and opportunities, they face several challenges. First, is the rigidity of utility regulation and business structures.
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Approximately 58% of respondents said this is the biggest roadblock to utilities investing in new business models.
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58%
trina
horner
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Effective, efficient, and relevant regulation will require regulators to hone their risk management skills to identify, monitor, manage, and mitigate risks, including those that impact safety, security, consumers, reliability, and, the utility itself from climate change. These skills will be critical in setting and executing regulatory priorities and will help regulators shape the Energy Cloud and ensure its long-term viability in a time of dramatic change.
Meet the Expert
Smart Cities Offer Utilities New Revenue Opportunities
Smart Cities Offer Utilities New Revenue Opportunities
Improving Utility Customer Experience via Voice of the Customer
Improving Utility Customer Experience via Voice of the Customer
Energy Cloud 4.0
Energy Cloud 4.0
Utilities Increasingly Affected by Extreme Weather
Utilities Increasingly Affected by Extreme Weather
Growing Global Residential Demand Response Industry
Growing Global Residential Demand Response Industry
The State and Future of the Power Industry 2018
The State and Future of the Power Industry 2018
Related Reading
Authors:
Mackinnon Lawrence
Jan Vrins
Investing in sustainable energy infrastructure and solutions, taking a customer-centric approach, and developing innovative business and regulatory models are all critical paths to staying relevant to shareholders and customers in tomorrow’s energy industry.
- Jan Vrins
