RESEARCH REPORT

In brief

In brief

  • Traditional utility business models and investments cannot accommodate the new unfolding energy ecosystem.
  • The terrain is challenging, but full of potential opportunities for greater growth and performance.
  • Energy providers must boldly embrace disruptive opportunities to shape their future.
  • The future belongs to the incumbents that challenge their operational legacy and drive into disruption with focus and ambition.


Energy providers are experiencing a time of fundamental, unprecedented disruption. With longstanding traditional business models and an often-conservative approach to innovation, many are vulnerable to disruption.

The influx of intelligent digital and new energy technologies, compressive or gradual market trends and shifting consumer dynamics are accelerating the pace of change. Other factors, including decarbonization and renewable mandates, fossil-fuel markets, and a host of new market players are compounding market volatility and vulnerability.

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What is clear: Traditional business models and current investment planning do not accommodate the new unfolding energy ecosystem. Regulators are also driving toward a broad trend of more open markets—encouraging new market players, increasing customer choice, and integrating renewables and distributed energy resources into the energy system. These continued policies and regulatory changes, together with disruptive trends, point toward a significant shift over the coming years.

For the next 10 to 15 years, energy providers will be in a constant state of flux as they pivot to a new power model in the presence of legacy assets and centralized fossil-fuel generation. Most energy providers will need to operate in a hybrid model and, with market maturity, technology and consumer adoption curves varying by geography, this model will be multifaceted, operating at multiple speeds.

Using disruption as an advantage, energy providers have a great opportunity to embrace transformation and innovative strategies that reinvent core operations, while innovating new prospects for performance and growth.

Energy providers must envision the intelligent utility in a more decarbonized, decentralized, customer-oriented and digital energy system.

Energy providers can tap into significant value trapped in legacy business and operating models to free up investment capacity, by unlocking cash for reinvestment. Furthermore, digital is creating significant value in downstream consumer-centric business models, the decarbonization of generation, infrastructure modernization and grid enhancement and expansion.

Successful providers are already pivoting to a new decarbonized, decentralized and digital world. They are developing future-oriented strategies and building new capabilities that allow them to seize new value and scale quickly.

Accenture believes transforming into the future intelligent utility requires a pathway combining three interlocking steps.

  1. Transform the current core to maximize efficiencies of traditional business leveraging new digital technologies.
  2. Grow the core business by looking for opportunities, for example, in countries with growing demand, better return on assets or regulatory predictability.
  3. Scale the new to shape a new wave of growth, leveraging new-generation technologies and downstream opportunities of a distributed resources world, with a new spectrum of customer-related services.

15-20%

Potential reduced maintenance service cost achieved through connected worker initiatives.

20-50%

Potential reduced cost to serve achieved through digitalization of customer operations.

Differing market structures, economic realities and disruption will impact energy providers in various ways. Yet all face the same reality: bold transformative moves are needed. While there is no single path forward, there are strategic imperatives energy providers can undertake to progress.

  1. Realize a new business model
  2. Build an innovation architecture
  3. Become relentlessly customer-centric
  4. Invest in digital from periphery to core
  5. Drive cost optimization
  6. Fuel the rise of the responsive workforce
  7. Foster new market and regulatory models
Matías Alonso

Senior Managing Director – Accenture Utilities

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