Professional Documents
Culture Documents
PwC’s energy transformation programme At its heart, this means addressing key • What are the implications for people
includes joint activities with companies questions such as: and operational change?
to support their future strategies and
map out the risks and opportunities • What will future market design look • What will existing and new competitors
involved. like? be doing?
• What are the implications for my • How best to continue to deliver
company’s purpose, role and shareholder value throughout the
positioning? transformation process?
• What are the business models that
I need to pursue?
Figure 2: The power sector has reached an inflection point where its future direction is much less predictable
Demand
Arab oil
embargo
destruction
Market
reform and ‘Golden age’ of utility reinvention?
liberalisation
Broad Emergence
industrialisation of new ‘Death spiral’ from disintermediation,
technologies technology disruption and customer
evolution?
Expansion of Fukushima
nuclear and gas nuclear
generation emergency
Emergent roles
Energy Supplier Integrator Enabler Optimiser
Key focus areas • Ensuring assets are • Facilitating grid • Enhancing the • Enabling customers
optimised in the interconnection with value of the grid to better leverage
market to match other transmission to all stakeholders behind-the-meter
price signals developers technology
• Addressing how to
• Achieving the right • Extending the leverage technology • Broader engagement
balance of asset-based deployment of to enhance system with the customer by
and notional technologies or performance and providing value
transactions within equipment into customer engagement through advanced
risk parameters the distribution data analytics
network
Distribution
Link supply Engage with
to load Transmission Retail customers
Storage
Storage used
to manage grid
Value-added
enabler
Product
innovator
Network
Pure play manager
merchant
Traditional ‘Virtual utility’
core business
‘Partner of
Gentailer partners’
Grid developer
Asset-based Service-based
• Develop a behind-the-meter • High penetration of customer • Offer, bundle, price, and cost-
distributed energy resource or third-party owned effectively deliver a wide range of
business, organically or through behind-the-meter distributed energy products (low cost, high
networks partnerships or energy resources renewables, local premise-based
acquisitions generation etc.) with selected
• Regulatory change enabling value-enhancing partners
• Increase customer engagement transmission and distribution
via new energy management operators to develop, own, and • Energy trading approaches to hedge
solution offerings and intelligent operate distributed energy business risk
tools resources
• Cost-effectively plan, develop,
• Develop alternative pricing • New entrants offering finance, construct, and operate the
packages and approaches that products/services that increase right asset mix
provide greater optionality or customer engagement in
risk/reward tariffs to customers managing their energy needs
through mobile tools or
social media
• Develop close relationships with • High penetration of distributed • Access to low-cost capital
distribution system operators and energy resources in urban areas
regulators to support large-scale combined with strong distribution • Partnering with generation
generation growth plans system operators and micro-grids, developers to expand project access
reducing the need for transmission • Robust operations to cost effectively
• Convince investment partners support
to invest in large scale, low-cost manage transmission and
renewable project developments • Other grid developers obtaining infrastructure upgrades
that require new transmission first-mover advantages in new • Identification of profitable regions
to urban areas markets for future expansion
• Implement world-class • Regulatory imposed incentives • Innovative contracting with the
operational procedures to where risks cannot be managed by supply chain to manage risks
improve cost-effectiveness and the grid developer alone
develop new forms of contracts
with generators, load managers
and the supply chain that
incentivise strong performance
and cost management
• Work with regulators to approve • High penetration of behind-the • Access to low-cost capital
investments focused on -meter distributed energy resources
advancing system capabilities and micro-grids, reducing the need • Investment recovery mechanisms
(smart grid) for a network manager to deliver • Data analytics systems
power
• Harden the infrastructure through • Predictive failure software
targeted investment • Regulatory mandates that create an
independent entity that assumes • Distributed energy resource
• Advance reliability standards traditional DSO roles integration
and awareness
• Develop partnerships with
distributed generation developers
to install, operate and manage
network connections
• Develop a compelling product • Multiple new entrants offering a • Keep customer acquisition costs low
suite including everything from range of new energy products to and operating costs overall low
the commodity to the home customers (e.g. attractive energy supply contracts
device or own energy supply)
• Incumbents and new entrants
• Develop opportunities for innovating on specific customer • Diversify the product portfolio
superior products that integrate offers beyond commodity products to
with other needs, such as home preserve margin
or building security or • Regulatory change enabling retail
automation energy sales • Establish partnerships to enhance
product range
• Invest in data analytics tools to • Bundling of offerings to enhance
develop excellence in customer product attractiveness • Focus on retention of profitable
acquisition and retention and high-volume customers and
• New tariffs offering risk/reward minimise switching
• Enhance brand reputation to opportunities for customers
support product expansion
• Develop a compelling suite of • Increasing choice and complexity in • Keep cost of service low,
services and identify the right the market in terms of technologies e.g. cross-selling multiple products
solution provider partners and providers to a single customer
• Create a range of relationships • Multiple new entrants offering • Keep customer satisfaction high by
with solution partners range of new energy and associated establishing clear customer service
services to customers standards, pinpointing and quickly
• Expand the range of channels to addressing customer pain points,
market that can be leveraged • Incumbents and new entrants and offering a wide range of
innovating on service delivery innovative yet convenient services
• Develop bundles of offerings models
targeted at the connected
customer • Regulatory change enabling retail
energy sales
• Enhance brand value
• Build-out ‘big data’ platforms • Low-priced/free behind-the-meter • Robust data analytics systems
devices
• Educate customers on energy • Pricing mechanisms for performance
management options • Regulatory change preventing
utilisation of customer data • Decision tools for customer adoption
• Design innovative methods
for sharing customer benefit • Leverage of third-party brand • High quality data security
for market entry management systems and protocols
• Deploy data synthesis methods
and tools
Virtual utility actions Competitor threats addressed Future virtual utility profitability
drivers
• Participate in distributed • High penetration of non-utility- • Offer structure and pricing of a wide
generation and storage projects owned distributed generation range of energy products (low cost,
and storage systems high renewables, local generation etc.)
• Develop partnerships with
technology-based providers • Regulatory change enabling • Ability to trade energy (sourcing and
retail energy sales consumption)
• Increase customer engagement
via intelligent tools • New entrants offering • Partnering with key players across
products/services that increase the energy value chain
• Define future roles for customer engagement in
incumbents in concert with managing their energy needs
regulators
Data Pricing
Data Ownership of grid and customer Shifts in traditional cost-
information can provide a recognition models can provide
knowledge platform that greater certainty to cost recovery
Regulatory Policy enhances the value proposition. and additional flexibility to rate
design.
Policy
Mandates and legislation can Partnering
Key levers shape the playing field and Enhanced creative and delivery
enhance the incumbent’s ability capabilities can extend the
to compete. incumbent’s existing platforms
Partnering Relationships and market reach.
Relationships
The natural interfaces of the Regulatory
Pricing incumbent with customers, Decisions can provide both
suppliers, stakeholders and offensive (exploit) and defensive
other providers create a (preserve) mechanisms to
natural platform. enhance market competitiveness.