For Utilities, the Energy Cloud Means Adapt or Die

In an article for Recharge, Navigant Research says industry transformation means utilities are no longer at the center of the power value chain

100 years in, and the electric industry is experiencing its most disruptive period ever. New technologies are expected to be adopted aggressively throughout the next decade, and by 2030, it’s likely that energy service providers will dominate the customer relationship, providing services such as solar and storage supply and maintenance, trading platforms, distributed energy resources (DER) aggregation services, smart home equipment, and more.

So, what does this mean for utilities? In an article for Recharge, Stuart Ravens, principal research analyst at Navigant Research, says it means the substantial risk of seeing revenue and relevance shrink to a fraction of what it is now.

“In this world, customers, not utilities, will be at the heart of the electricity value chain,” he writes. “As a result, existing business models will be significantly disrupted. The old volume-based supply model will be replaced by competitive energy services, which help to reduce customers’ needs for grid-sourced power, lower overall energy costs, and maximise returns on customers’ investments into solar and storage.”

He adds that while grid-sourced power will still be required, demand will be significantly reduced.

“Utilities that resist the current transformation or complacently believe it will not affect their current business models could be in for a shock,” Ravens says.

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