The Digitally Enabled Grid: How can utilities survive the energy demand disruption?

How can utilities survive the
energy demand disruption?

2Copyright © 2015 Accenture All rights reserved.
How will new energy technologies
increasingly disrupt network costs and
performance, and existing business models?
15%
Potential of demand reduction
from rapidly evolving energy
technologies by 2025
Energy conservation
and demand response
Energy efficiency
(Building shell insulation, efficient
appliances)
Energy substitution
(Electrification of transport and heating)
Distributed generation
(Photovoltaics, storage, mini and micro
CHP)

Accenture Digitally Enabled Grid
research program
An annual research program to evaluate the implications and
opportunities of an increasingly digital grid
(2014) Survey:
(2014) Scenario analysis model:
85 utilities executives interviewed in
20 countries
Extensive modelling to assess how distributed
energy resources, energy efficiency, energy
substitution and energy conservation and
demand response would impact the network and
business models

Source: Accenture’s Digitally Enabled Grid program, 2014 and 2013 executive surveys.
Increasing
internal and
external
pressure to
address the
complexity, cost
implications and
opportunities
from the future
grid
Competition to grow
Risk of grid faults to rise
Threats to revenue to increase
2013
2014
43%
61%
Distributed generation?
Competition in data-related
services?
2013
2014
85%
92%
Distributed renewable generation
(low-voltage connection)?
2013
2014
41%
61%

How far will new energy technologies disrupt
costs and performance, and existing business
models?
Up to $48bn
revenue at risk in the United
States based on load reduction
Up to €61bn
revenue at risk in Europe*
based on load reduction
STATUS QUO
DEMAND
DISRUPTION
PERFECT STORM
3
scenarios to assess
the impact of new
technologies on load
and the utility
business model
Source: Accenture Analysis. * Europe analysis includes Belgium, France, Germany, Italy, Netherlands, Poland, Portugal, Spain, Sweden, United Kingdom.

PERFECT STORM
STATUS QUO
DEMAND
DISRUPTION
Reduction in load
Increase in impact on
operations and
reliability
Drop in revenues
The most likely scenario?
Changes accelerate
with favorable
economics
Greater penetration
of
energy efficiency
distributed
generation due to
customer behavior,
lower technology
prices and higher
electricity prices

Beyond the
meter services
Distribution
platform
integrator
Energy
services
“Obligation
to serve”
“Commitment
to optimize”
Commodity
delivery
Distributed
energy
production
services
Information
services
Intelligent grid
operator
Pure-play
transport
Utilities will need to rethink their role and
scope in the value chain

3major areas
of focus to
manage
migration to a
new model
Protect earnings in
current model and
shape migration to
new model
FOCUS AREAS ACTIONS
Regulations
and tariffs
New customer
model and
services
Grid
optimization Invest in key
capabilities in
preparation for
new model
Make strategic
choices on role
and scope of
services in market

1strategic
roadmap that
considers the
three focus
areas critical
to migration to
the new model
Grid operations
improvement
(0 to 3 years)
Improved integration
and control
(2 to 5 years)
Fully digital grid
(3-10 years)
New tariffs and
policies for DG
(0 to 3 years)
Distribution
communities
(2 to 5 years)
Platform
distribution
provider
(3-10 years)
Digital customer
interaction model
(0 – 2 years)
Service trials and
extensions
(0 to 3 years)
Scale digital
services and
platform
(3-5 years)
Grid
optimization
Regulations
and tariffs
New customer
model and
services

Grid operations
improvement
(0 to 3 years)
Improved integration
and control
(2 to 5 years)
Fully digital grid
(3-10 years)
Grid
optimization
Utilities see increasing value from
smart solutions, in particular in
grid operations
2013
2014
58%
68%
2013
2014
58%
68%
Distribution sensing and automation? Distribution management systems (DMS?)

New tariffs and
policies for DG
(0 to 3 years)
Distribution
communities
(2 to 5 years)
Platform
distribution
provider
(3-10 years)
Regulations
and tariffs
No
Yes - moderate
Yes - significant
65%
31%
4%
2013
34%
61%
5%
2014
Utilities expect increasing
development of microgrids in the
next five years

Digital customer
interaction model
(0 – 2 years)
Service trials and
extensions
(0 to 3 years)
Scale digital
services and
platform
(3-5 years)
New customer
model and
services
74%
A company that
focuses exclusively
on solar energy
71%
Your energy
provider
41%
Home improvement
or electronics
provider
38%
Cooperative
or community
organization
33%
A home
maintenance and
repair company
18%
Phone or
cable provider
16%
Online retailer
Source: Accenture, The New Energy Consumer: Architecting for the Future, 2014.
Utilities are consumers’ number
two preferred providers of solar
energy products and services

• Distributed energy resources (DER) are at a tipping point
• Consumer deployment choices will result in technical and financial stresses
• Competition from new entrants is anticipated to build
• The distribution company model will have to change
Focusing on grid optimization, tariffs and regulation
and new customer services and models will be key,
as well as investing in new capabilities
Toward a digitally enabled
grid model

Learn more about how utilities can survive energy
disruption
Digitally Enabled Grid program
www.accenture.com/digitallyenabledgrid.com
Follow us at: @AccentureGrid

The Digitally Enabled Grid: How can utilities survive the energy demand disruption?

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The Digitally Enabled Grid: How can utilities survive the energy demand disruption?