new and future business models for energy utilities
TRANSCRIPT
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New and Future Business Models forEnergy Utilities
Thomas Houareau, Consulting Director
Energy & Environment
1 July 2015
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Today’s Presenter
• Over 10 years with Frost & Sullivan in Energy & Environment and related
industries
• Leader in more than 70 consulting engagements in the power generation and
transmission sector
• Extensive track record working with leading power utilities and global power
equipment manufacturers
Thomas Houareau, Director, Frost & Sullivan
The Power Generation Model: A Changing Landscape
Traditional Grid Infrastructure
Smart Grid Infrastructure
Offices
Isolated
Microgrid
Central Power
PlantIndustrial
Plant
Windfarms
Storage
Advanced batteries to store energy
generated during off-peak times
Sensors
Detect fluctuations in the grid and
can help isolate the areasDemand Management
Consists of tools to manage
power consumption during
peak hours
Generators
To reduce the demand
on the grid
Solar
Panels
Processors
To execute the security
schemes in the grid
Smart Appliances
Can shut down as a
response to
fluctuations in the
grid.
Source: Frost & Sullivan analysis
Power
Station
Houses Office Buildings
Conventional Grid and
Infrastructure
Factory
Invest in a plant, earn a return ...
Global scan – where are utilities challenged most?
Source: Google Finance, Frost & Sullivan analysis.
Europe
EDF �42%ENEL �8%Engie �31%E.ON �50%RWE �59%Fortum �5%SSE � 45%Iberdrola � 16%
North America
Duke Energy � 66%
Southern Co. � 49%
Dominion Resources �
103%
NextEra Energy � 100%
Exelon � 23%
American Electric � 71%
PPL Corp. � 14%
PG&E � 22%
Asia
China Yangtze � 20%CLP Holdings � 25%Power Asset Holdings �75%TEPCO � 79%KEPCO � 43%NTPC � 33%
European is the most liberalized market and utilities have experienced the most decreases in their share prices –the rest of the world on the other hand has fared much better.
Global Top 22 Utilities Share Price Changes 2009 - 2014
Top 10
Countries for
solar PV
installations
Degree of impact on existing models and need for change
Source: Frost & Sullivan
There are a number of factors influencing the level of pressure being exerted on utilities to change their existing business models. What is key is a first mover strategy in the less competitive markets.
Degree of Pressure on Utility Revenues, 2015 - 2020
Degree of competition
Investment in renewables (incentives, LCOE)
Electricity demand growth
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2
3
Key Influencers
Capacity mechanisms4
Future Business Models??
1. Virtual Power Plants
2. Pure play Aggregator
3. Technology
Provider
4. Energy Services Provider
Key business models for capturing downstream value opportunities in distributed generation
• The most likely strategy will be for utilities to leverage on their existing customer networks and offer a flexible and variable services offering.
There are various models for downstream integration but the most likely scenario is a hybrid of these.
Business Model – How an organization
creates, delivers and captures value.
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For Additional Information
Chiara Carella
Head of Corporate Communications
Europe, Israel and Africa
+44 (0) 207 343 8314
Cyril Cromier
Vice President - Sales
Energy & Environment
+33 1 42 81 22 44
Thomas Houareau
Director
Energy and Environment
+44 (0)20 7343 8329