de martini - caltech resnick utility business models oct 1 2012
TRANSCRIPT
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© 2012, Newport Consulting Group
Customer Driven Business Model Evolution
Paul De Martini
October 1, 2012
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Base Case: The transformation takes place, but the pace is
slower, since utilities have neither policy incentives nor strong
market demand.
Market Driven: Progress is limited to areas the market can pull
forward without incentives, mandates or subsidies. Conditions are
chaotic, with policies, regulations and standards varying widely by
region.
Policy Driven: Federal and state legislation and regulation creates
powerful incentives and mandates. Utilities find themselves
pinched as policymakers push changes without providing the
money to pay for them.
Rapid Development: Most disruptive and unpredictable scenario.
The confusion of an Internet-style frenzy is counterbalanced
somewhat by standards and guidelines from policymakers and
regulators. Utilities have the most opportunities in this
scenario…but also the most risks.
Market Driven
Policy DrivenRapid
Deployment
Base Case
Po
licy
Influe
nce
Economic
Growth
Source: EEI Smart Technology Scenario Workshops
EEI Future Scenarios
60 industry experts agree on disrupted end state – question is pace and timing
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Signposts point to different experiences and pace of change across US
Market Driven
Policy DrivenRapid Deployment
Base Case
5 Forces Driving Transformation
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Source: ACEEESource: EIA
2011 US State Renewable Policy 2010 US State EE Policy
Policy is Spurring DER Adoption
Combined with accelerating improvements in DER technology price & performance are creating opportunities for electric system efficiencies
4
Over 80% of US population under the equivalent of EU’s 20/20/20 Plan
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DER will exceed Coal Gen Capacity by 2020
Solar PV system installed in US every 7 minutes in 2012Source: SEIA/GTM Research
New economies of scale & potential network effects driving business opportunities
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Customer Evolution
Linking Smart Grid with Web 2.0 Enables Customer Partnerships
6
CustomerIn Control
CustomerIn Context
CustomerCollaboration
CustomerCo-creation
Green Button Zero Net Energy
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Evolving Energy Ecosystem
Convergence of Four Key Networks
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Responsive Demand
Central to Distributed Transition
Fundamental shift for industry business and operational paradigms
Distributed Gen
Electric Network + Central Gen
Energy Storage
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Customer-Grid Evolution
Business opportunities exist on both sides of the evolution curve, but require new
methods to be successful – this isn’t déjà vu circa 1997 or DR aggregation or Texas
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3° of Value in Electric Industry
10
Opportunities are expanding beyond traditional value chain creating value
networks – need to look beyond the zero sum game of traditional value chain
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27+ potential values, only a handful can be effectively monetized today
1° DER Values & Differentiated Services
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Market Facilitator: Energy eBay + PayPal
Opportunity to create distributed market platform with related market services to
enable millions of participants and billions of transactions
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Customer Energy Solution: Salesforce.com
Focus on managing customer energy related processes to achieve
business/lifestyle integration
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Conceptual View of Customer Energy Related Transactions Occurring Today Across 3°
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Business Model Framework
Business model decisions require deeper thinking than what spot on
the continuum looks interesting – platforms, control points, revenue
models & core capabilities are all critical elements
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Telecom Lesson: BAU is not a good strategy
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Telecom growth from new services – basic voice service losing money
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Telecom Lesson: BAU is not a good strategyDER Growth will disrupt distribution model
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