Energy providers are increasing the pace of innovation to achieve two transformation goals: delivering the energy transition and meeting emerging customer needs by becoming digitally enabled businesses. To innovate effectively, they are forming new partnerships. These partnerships can help energy providers to reinvent the customer experience, enter new markets, and access highly specialist capabilities.
How are energy providers approaching partnerships and acquisitions, and where can these arrangements add most value?
Build, buy, or borrow?
Accenture’s new survey of 500 energy providers finds a high proportion seeking to engage third parties in joint innovation efforts:
of energy providers plan to partner with established businesses to develop new customer-centric innovations.
plan to partner with start-ups—and the same number with academic institutions.
But energy providers are not just relying on external organizations; many are also focusing on delivering innovation by building their own capabilities.
of energy providers plan to build new innovations in-house.
For some energy providers, innovation is a long-term project, and they expect to make acquisitions to accelerate their progress.
plan to acquire start-ups with promising innovations.
Whether energy provider build, buy, or borrow depends on the capabilities they want and their existing skills, capital availability, and market conditions. Whichever route they choose, the main aim is to accelerate the process. Our previous New Energy Consumer Research shows that, in new markets such as electric vehicles (EVs), it is important to enter early to build a position. As the energy transition disrupts energy providers’ traditional business models and creates opportunities for new ones, speed to market is everything.
They can give access to new capabilities and accelerate innovation.
Within the boundaries of privacy regulations and security measures, data collaborations can produce a more personalized customer experience.
They can create opportunities for combined offerings—hardware and software, energy and services—with lower upfront investment costs. This will help to accelerate the uptake of low-carbon solutions.
One firm using partnerships to propel greener solutions is Duke Energy. “We're always looking to do strategic partnerships to meet customers in their daily lives,” says Barbara Higgins Consultant at Duke Energy. “And to help us advance cleaner, smarter, more reliable ways for customers to consume their energy."
In line with this is the company’s partnership with Nest, Google’s line of smart home products. The partnership will allow Duke Energy to develop a suite of products and services to help customers save energy and lower their bills.
Partnerships power the e-mobility revolution
Partnerships are also reshaping the future of the energy sector and its relationship with consumers in e-mobility and EVs. These partnerships are a vital part of the transition to net-zero and of helping to drive societal changes that are too large for one single company to influence.
Enel X, for instance, has joined up with Volkswagen to increase EV uptake in Italy. The joint venture will function as an owner and operator for a high-power charging network of more than 3,000 charging points across the country.
Another partnership that is pioneering new forms of e-mobility is Free2Move eSolutions, a joint venture between multinational automotive firm Stellantis and NHOA (formerly Engie EPS). Free2Move eSolutions is now partnering with Accenture to offer a subscription-based EV charging platform with a more intuitive customer experience, and new joint offerings to support large companies as they electrify their fleets.
Build, buy, or borrow? Evaluate the business case for different approaches to securing the capabilities you need to reach your strategic goals. Seek partnerships that help you reach new customers, enable data collaborations, and drive products and service innovation. Consider partnering with established businesses, as well as promising disruptors.
Develop partnerships to reduce time to market and scale at speed. Recognize that building a position in new markets takes time and structure collaborations and joint ventures around a shared long-term vision.
Use partnerships to gain data-driven insights into your customers’ needs. This will enable you to identify opportunities for products and services that resonate with existing and potential customers.