Capturing Business Value through Disruptive Energy Platforms
The energy sector is in the midst of a major global transformation. During the next 5-15 years, Navigant expects massive disruption across the entire energy value chain that will affect a broad set of stakeholders. This transformation is primarily being fueled by multilateral efforts focused on decarbonizing the global economy to address climate change and a shift toward an increasingly clean, intelligent, mobile, and distributed energy ecosystem.
Linear value chains supporting one-way power flow from centralized generation to end customers will give way to a more sustainable, highly digitized, and dynamic energy system. Moving toward a multidirectional network of networks and away from a linear hub-and-spoke model, this system will support two-way energy flows in which customer choice (optionality), clean energy, innovation, and agility command a premium. At Navigant, we call this the Energy Cloud.
Navigant’s white paper, Energy Cloud 4.0: Capturing Value through Disruptive Energy Platforms, is the next installment in Navigant’s Energy Cloud series. The paper examines the impacts of an Energy Cloud future, profiles the emergence of dynamic, high-growth platforms, and finally, provides a framework for capturing value.
Multiple Energy Cloud trends and tipping points indicate that the energy transformation is already well underway. Energy Cloud 4.0: Capturing Value through Disruptive Energy Platforms explains the forces behind these trends and tipping points and how stakeholders can leverage them.
A cleaner, intelligent, increasingly mobile, and more distributed grid is just around the corner. Fully realized, the Energy Cloud will significantly reduce the amount of power flowing through the bulk grid and result in value shifting downstream to the customer and a reshuffling of market share among incumbent and new market entrants.
New value will be created and captured across highly dynamic and disruptive Energy Cloud platforms, including Integrated DER (iDER), Transportation-to-Grid (T2G), Building-to-Grid (B2G), Internet of Energy (IoE), Transactive Energy (TE), Smart Cities, and the Neural Grid.
Organizations should be prepared for all potential Energy Cloud realities. This includes considering high disruption scenarios that threaten to put your organization out of business and, potentially, leveraging paradigm shifts to reinvent your business and capitalize on opportunities seemingly far-fetched today.
Energy incumbents, especially utilities, have less than 5 years to reorient their products and business models around fast emerging technology ecosystems like iDER, Smart Cities, and IoE or risk becoming a fringe player in the emerging energy economy.
Service-based and network orchestrator business models leveraging fast emerging Energy Cloud platforms have the potential to scale faster and yield greater profit margins than the traditional asset-focused and supply models that currently dominate the industry.
To prepare for organizational transformation and drive sustainable excellence into the future, we recommend energy companies and utilities adopt an Energy Cloud Playbook.
Energy Cloud platforms sit at the confluence of rapidly changing customer demands and highly disruptive technology. These emerging platforms have the potential to scale faster and yield greater profit margins than the traditional asset-focused and supply models that dominate the industry today, and offer the potential to offset flat or declining load growth.
Leader of Navigant’s Global Energy Practice
Energy companies and utilities need to be proactive in responding to changing market pressures and increasingly agile in adopting innovative new business models. Although policy and regulatory reform is an important driver of transformation, customer choice and technology innovation are relentless instigators of disruption. These forces are critical in understanding the Energy Cloud transformation.