Falling costs and regulatory pressures are accelerating adoption of distributed energy resources (DER). Change is happening so quickly, utilities aren’t prepared and furthermore, they are getting pushed toward irrelevance.
In this fast-changing era of energy, slow and steady does not win the race. Utilities must act on the DER opportunity now to defend against threats and offer more clean and affordable energy to customers, before the point of no return is reached.
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Current customer experience practices push Utilities towards irrelevance. Utilities are losing their competitiveness to market entrants that are leveraging digital technologies to deliver the experiences that customers are enjoying in other industries. New entrants are better equipped to address customer needs because they have platform thinking, whereas incumbents are stuck in a legacy mindset and are hamstrung by legacy operating models.
Current cost-of-service models result in lost revenue and cross subsidization. As the market continues to swiftly adopt DER, cost-of-service models have not evolved concurrently. This has artificially inflated DER value and the costs to maintain necessary support infrastructure are not being recovered.
Current infrastructure and capabilities are too weak to handle DER integration. 48 percent of consumers expect their energy provider to partner with other companies to offer DER-related packages that enable them to generate and store energy. Utilities don’t have the necessary systems and infrastructure to keep up with adoption, resulting in curtailment of DER.
To regain their competitive edge and keep pace with new market entrants, Utilities must:
Enhance the customer relationship
Develop hyper relevant experiences and build trust. Utilities are in a unique position in that they have an established connection with customers—use that as a point of differentiation.
Deliver what customers really want
Identify fundamental customer needs and determine how much to invest—and where—in order to deliver those services. Analytics is a critical tool for understanding customer segments and desired capabilities.
Build, borrow and buy capabilities
Look beyond the current value chain to others they can collaborate with or acquire to deliver digitally enabled services and experiences. Join forces with the broader ecosystem before you find yourself sitting outside of the inner circle.
Challenge regulatory boundaries
Develop regulatory and business models to provide the desired service to maximize value and be proactive with your regulators.
Managing Director – Accenture Strategy, Utilities
Managing Director – Accenture Strategy, Utilities
