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Low carbon, high stakes: Do you have the power to transform?

Five new business model pathways toward a low-carbon energy system

Overview

In the quest toward a low-carbon energy system, the electric utilities sector—with a 25 percent share of all carbon emissions globally—plays a crucial role. How can utilities move away from fossil fuels in an economically sustainable way? Five low-carbon business model pathways could enable utilities to significantly reduce greenhouse gas emissions and capitalize on €210 billion to €325 billion in value created annually in new products and services by 2030.

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Key Findings

As the global community seeks to combat climate change, five broad trends are pressuring utilities to transform themselves to embrace sustainable alternatives:

  • Policy initiatives are pushing to limit the rise in average global

  • Advances in technology are enabling the production of low-carbon energy at scale

  • Impacts of climate are threatening the current and future energy supply

  • End users are demanding energy efficiency and low-carbon energy

  • Non-traditional energy entrants are challenging incumbents

These trends highlight the risks in the established utility business model, based on selling electricity as a commodity. Quite simply, utilities must move from carbon-intensive businesses to lower-carbon ones—while still meeting the world’s energy needs and sustaining profitable growth. Fortunately, while utilities’ traditional value pool is at risk, new ones could be created that, together, could add up to a value opportunity of €245 billion to €380 billion per year worldwide in 2030.

Energizing Electricity

1.3 trillion reasons for electric companies to harness digital transformation

 

Established players and startups alike are experimenting on the fringe of the industry. Turning this commodity into an experience built around the customer. Thanks to digital. According to New research from Accenture and the World Economic Forum (WEF), the value from rapid digital transformation for the industry is a staggering $1.3 trillion of value by 2025.

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Electric-sector players can capitalize on low-carbon value opportunities via three emerging power plays:

  • Low-carbon energy producer optimizing the mix of energy sources

  • Distribution platform optimizer meeting demand with optimal sources of supply

  • Energy solution integrator providing entirely new services to help customers optimize their energy production and consumption

These represent platforms for five low-carbon business model pathways that can help utilities’ move away from fossil fuel and still grow profitably. By embracing these pathways, the electric sector will become a major contributor in the fight against climate change while positioning itself to ensure its existence in a more sustainable future.


Authors

Justin Keeble

Justin Keeble advises organizations on the management of social and environmental issues as drivers for innovation and enhanced business performance. He has over 17 years of experience and leads Accenture’s Sustainability Strategy practice for Europe, Africa and Latin America. He has worked across numerous industry sectors as well as work for the World Economic Forum, the UN Environment Programme, and the WWF. Justin is based in London.

Alexander Holst

Alexander Holst focuses on integrating sustainability aspects into the core business of clients across numerous industries. He specializes in helping organizations look at how to value ecological and societal aspects and to capture financial benefits by integrating them into product portfolios, processes, and business models. He leads Accenture’s Sustainability Strategy practice in Germany, Austria and Switzerland with 18 years of experience in the Utilities sector. Alexander is based in Berlin.

Manon van Beek

Manon van Beek has more than 20 years of experience in the Utilities industry across Retail and Gridco’s. She leads Accenture’s Utilities Strategy practice for Europe, Africa, and Latin America; and is also the Country Managing Director for Accenture in the Netherlands. She specializes in helping organizations with business transformation, and is an active leader in- and outside of Accenture on topics such as Innovation, Sustainability, Leadership and Diversity. Manon is based in Amsterdam.