Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on October 10, 2013
40 Percent of Utilities Predict ‘Complete Transformation’ by 2030
The words “utility” and “transformational” are rarely, if ever, tossed together in the same sentence. Yet utilities say they are expecting an overhaul of their business in the coming decades, and many realize such a metamorphosis is essential to survival.
The 13th annual global survey of utility executives from consulting firm PwC found that 94 percent of participants said the utility business model would undergo important changes or a complete transformation between now and 2030.
If that timeframe seems a little lengthy compared to the evolution of other sectors, it is. But in utility years, it’s practically the speed of light. Even more interesting is utilities’ increasing acknowledgement that they need to change.
The changing dynamics, especially the move to decentralized generation and the need for two-way power flows to accommodate assets at the grid’s edge, have been happening for some time. What is interesting is that the region with the highest expectation of transformation is not Europe with its aggressive renewable goals, but rather Asia, where nearly 70 percent of participants see transformation coming.
Many of those surveyed don’t see a world that ditches centralized generation all together, but rather a mix of distributed energy resources and more centralized plants. But it doesn’t take a complete overhaul of the generation mix to cause havoc for utilities.
A free report that was just released by GTM Research looks at the issues at the grid edge that are driving the changes happening in the electric utility market. With enough rooftop PV on a distribution circuit or a large number of wind farms on a single feeder, utilities have to find ways to balance the intermittent renewable power while still using as much of it as possible.
An important finding from the PwC survey is that it’s not just renewables, it’s also the first fuel — that is, energy efficiency — that is driving investment for many utilities, particularly in Asia.
No matter what the drivers are, experts across the industry agree that the time is now for investment in new systems and regulatory overhaul. By 2030, some utilities could very well be left behind in the new energy economy.
“Technology changes, particularly in IT, and the potential that arises from smart grids and demand-side management is going to change the business model in the power utilities sector,” asserted Jeroen van Hoof, assurance leader at PwC Power & Utilities. “The big question is whether existing players are capable of driving that change, or whether the momentum will come from other entrants. If it’s the latter, the role of existing utilities could shift to the low-margin business of providing backup capacity.”
6 Comments on "40 Percent of Utilities Predict ‘Complete Transformation’ by 2030"
Mike on Thu, 10th Oct 2013 8:06 pm
Cool story bro!
GregT on Thu, 10th Oct 2013 8:35 pm
Utilities companies rely heavily on inputs from fossil fuels. As fossil fuel prices continue to rise, utilities expenses will continue to rise, and those costs will be passed on to the consumer. When fossil fuels become prohibitive pricewise for most people, or can no longer meet demand, utilities companies will no longer be viable, and will go out of business.
It has already begun, hydro electric power generation costs in B.C. are exceeding the rate of inflation, by 400% annually. Aging infrastructure is adding to those costs, as all infrastructure is reliant on fossil fuels in resource extraction, manufacturing, transport, and construction.
action on Thu, 10th Oct 2013 9:39 pm
The complete transformation will not resemble anything mentioned in this short, nonsensical piece that lacks specifics, and fails to include the hugely important dynamic that Greg T mentions. Smoking the green tech media.
Kenz300 on Thu, 10th Oct 2013 9:48 pm
As wind and solar continue to become cheaper every year there will be continued transition to those sources which will lead to a more distributed and less centralized grid. More and more companies are producing their own power or are looking to do it in the future. Even the military is looking to generate power locally for its bases.
J-Gav on Thu, 10th Oct 2013 10:30 pm
For all we know, ‘smart’ grids, despite all the hype now in circulation, could turn out to be pretty damn dumb. As a ‘for instance,’ what happens when the metering shuts down due to “technical difficulties?” Like it occurs now about every week or two with internet/TV services in the major metropolis where I live? fokay, it eventually comes back on but does anybody think they’re gonna get that right, as in ‘down pat’ first time? Hrumphh!
BillT on Fri, 11th Oct 2013 3:20 am
As usual, their answer is more tech, not real change. Of course, they could not actually say that their corporations are dinosaurs and soo to become financially extinct. The only statement I could agree with is the pone about speed. Most of their infrastructure was built 50+ years ago in the age of $5 oil and cannot even be maintained with $100+ oil.
Interesting that they placed wind power as their lowest concern. But they did notice solar panels.
Just like big oil, these guys are not going to admit publicly that the electric corporations are going to disappear along with oil. They need suckers to buy their stock.