Vast Majority of Utility Stakeholders Expect a Major Shift in Business Models Because of Distributed Energy
July 05 2016 - 8:30AM
Business Wire
Navigant and Public Utilities Fortnightly
Release State & Future of the Power Industry Report
Today, Navigant (NYSE:NCI) and Public Utilities Fortnightly
(PUF) released “State & Future of the Power Industry”, a
special report exploring the current status as well as the future
of the electric utility industry. The report signals change is
coming, and while 90% of utility stakeholders say that distributed
energy resources (DER) will force a shift in utility business
models, they are split (50-50) on the timing of this shift.
The report presents findings from a PUF reader survey of 366
utility industry insiders on the future of electricity, summarizes
“off-the-record” conversations held by PUF editor Steve Mitnick
with utility leaders about electricity’s future, and includes
perspectives from experts within Navigant’s Global Energy segment
on where they see the industry shifting and evolving.
"This study points to several forces that will continue to
transform the way utilities do business. Although DER is already
growing faster than central station generation this year in North
America, this trend varies by region as the policy approach,
regulation, market dynamics, and structure differ,” said Jan Vrins,
leader of Navigant’s Global Energy segment. “North American
utilities are at various stages of integrating distributed
generation, demand response, energy efficiency, electric vehicles,
and energy storage. Many are unprepared for the dynamic impact
these resources will have on integrated resource planning and
current grid operations. Since there is no one-size-fits-all
approach, Navigant has developed a flexible playbook that helps a
utility develop an integrated DER strategy and approach, based on
its maturity level and the market in which it operates.”
Although more than half of survey respondents believe the role
of regulated utilities would not undergo significant change in
providing services to customers within the decade, most recognize
that advances in technology and changing customer demands present
new opportunities and challenges. These findings suggest a more
conservative approach by utilities, with 70% of respondents
indicating that a utility’s ability to provide reliable power is
still the most important role, significantly ahead of affordable
and green power.
Additional key findings from the survey include:
- Solar Photovoltaic (PV) (70%), energy
efficiency (42%), demand response (40%) and energy storage (39%),
were named as the most prevalent DER solutions in terms of capacity
by 2025.
- More than 90% of survey respondents
believe that the growth of DER will force a major shift in utility
business models.
- Almost 50% of industry respondents
pointed to a supportive regulatory environment as the most
important tipping point for moving aggressively into owning and
operating DER.
- Almost 50% of the survey participants
believe that by 2025 there will be five or more states to adopt a
distribution-level system operator model.
- Over 80% of the respondents believe
that residential and commercial customers’ demand for choice and
control will change moderately (50%) or substantially (33%).
- Emerging customer engagement channels
that respondents believe will be most widely used to deliver value
to customers are: apps (55%), behavioral & analytical
demand-side management (38%) and integrated energy services
platforms (37%).
- Survey findings point to an increasing
threat of cyberattacks, as a result of increased connectivity on
both sides of the meter:
- 55% of the respondents expect there
will be one or two serious electric service disruptions in the
coming years.
- 30% expect there will be several
serious service disruptions in the coming years.
“While utility stakeholders voice widespread consensus that the
industry is facing profound change and advances in technology and
changing customer demands present new opportunities and challenges,
the lack of urgency to change the services offered to customers
that surfaced in this report is concerning," added Vrins.
"Providing reliable, safe, and affordable power are table stakes,
and utilities must evolve their business models to include
sustainable, intelligent, and distributed elements of the energy
cloud in order to serve their customers and protect shareholder
value.”
To see the full report and to learn more information about
Navigant’s Global Energy segment, click here, and join the social
media conversation through #EnergyTippingPoints.
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.
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160705005313/en/
For more information:Navigant Investor RelationsAaron
Miles, 312-583-5820orNavigant Corporate CommunicationsMegan Maupin,
312-583-5703
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