Distributed Energy Resources Pose Biggest Disruption to Utility Business Model
July 05 2017 - 9:30AM
Business Wire
Navigant and Public Utilities Fortnightly identify key
challenges, provide guidance for utility leadership in new industry
report
Today, Navigant (NYSE:NCI) and Public Utilities Fortnightly
released the second edition of “State & Future of the Power
Industry,” a special report exploring the current status as well as
the future of the electric utility industry.
Key findings from this year’s report highlight that although low
natural gas prices and renewables are impacting the utility
industry, the biggest disruption is coming from increased
penetration of distributed energy resources (DER), as well as the
broader digitization of the utility value chain.
“As the industry transformation accelerates toward a cleaner,
digital, distributed, and mobile grid infrastructure, the
disruption facing the industry will proliferate and become
increasingly complex,” said Jan Vrins, managing director and global
Energy practice leader at Navigant. “This report shows that
utilities must provide new energy products and services to their
customers that are supported by new business models that will allow
them to continue to deliver customer and shareholder value.”
By 2030, Navigant expects the global market for DER, digital
energy products, and services will create at least $1.3 billion in
new revenue opportunities globally, according to the report. New
DER capacity from distributed generation, energy storage, energy
efficiency, demand response, microgrids, and electric vehicles is
expected grow three to five times faster than new central station
generation in the next 10 years.
“Specifically, energy efficiency and distributed generation are
putting pressure on overall load growth and disrupting the
traditional utility business model,” Vrins said. “This is occurring
as the industry faces fast-paced changes in policy, regulation,
technology, and customer demands.”
Additional findings in the report are based on interviews with
key executive leaders in the segment, including Navigant experts,
as well as a Public Utilities Fortnightly survey of more than 400
utility industry leaders. The survey results revealed current
thinking on the biggest issues facing utilities today:
- Nearly half of the respondents see
increased penetration of DER as the most disruptive threat to
traditional utility business models over the coming decade, and
more than 60 percent believe it will force a major shift in
business models in the next decade.
- Roughly 40 percent believe technology
cost reductions will be the greatest driver of clean, renewable
energy adoption over the next decade.
- One-third ranked electrification of
transportation as offering the most revenue growth potential for
utilities.
- Over 40 percent of respondents agree
that wind and solar, combined with storage, are the most viable
resource alternatives to backfill declining baseload
generation.
- Four in 10 respondents point to a
supportive regulatory model as the most important tipping point for
utilities to aggressively pursue owning and operating DER.
- And, over two-thirds of the respondents
see energy platform provider or network orchestrator as the role
for the future utility to pursue.
To see the full report, click here, and join the social media
conversation through #FutureUtility.
About Public Utilities Fortnightly
Public Utilities Fortnightly (PUF) has been, since 1929, the
magazine of record for the electric and natural gas utilities
industry. It is a forum for commentary, opinion and debate on
utility regulation and policy. PUF is must-read for the broad
readership of some fifteen thousand-plus senior utility managers,
regulators, policymakers, and leaderships of the asset
owner/developer, advocacy, financial, legal, engineering, economic
and consulting communities that must address the industry's
challenges every day.
About Navigant
Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global
professional services firm that helps clients take control of their
future. Navigant’s professionals apply deep industry knowledge,
substantive technical expertise, and an enterprising approach to
help clients build, manage, and/or protect their business
interests. With a focus on markets and clients facing
transformational change and significant regulatory or legal
pressures, the firm primarily serves clients in the healthcare,
energy, and financial services industries. Across a range of
advisory, consulting, outsourcing, and technology/analytics
services, Navigant’s practitioners bring sharp insight that
pinpoints opportunities and delivers powerful results. More
information about Navigant can be found at navigant.com.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170705005515/en/
Navigant Investor RelationsJennifer Moreno Reddick312.
573.5634jennifer.morenoreddick@navigant.comorNavigant Corporate
CommunicationsBelia Ortega312.583.2640belia.ortega@navigant.com
Navigant Consulting (NYSE:NCI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Navigant Consulting (NYSE:NCI)
Historical Stock Chart
From Apr 2023 to Apr 2024