The Transformational Play for Utilities

Digital: The Transformational Play for Utilities

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Each driver is fueled and accelerated by the migration to digital

Demand disruption Disruption in demand from new energy technologies

Asymmetric competition Competition from new players in the value chain

Customer choice Change in customer behaviors and expectations

Capital contention Increased scrutiny on the growth of capital spend

Policy activism Motivation and goals of regulators and policy makers

An array of powerful forces are driving change in utilities’ business models


52% of consumers are likely to install energy technologies similar to new solar products and services in less than 5 years

Solar panels Electric vehicles Storage Microgrids

+50% of consumers are considering an electric vehicle for their next car purchase

58% of consumers are interested in back-up energy storage

+66% of utilities executives expect the deployment of microgrids to grow and proliferate, nearly doubling from 2013 and 2015

Sources: Accenture New Energy Consumer research program and Accenture Digitally Enabled Grid research program.

Consumers are interested in using a widening range of energy technologies to support their lifestyles


GenerationMarket

Operations Transmission Distribution

Residential and SMBCommercial & Industrial

Digital asset management

Digital field worker

Digital commercial optimization

Intelligent grid operations

Digital enterprise services/corporate functions

Interactive demand optimization

Digital customer interaction

Digital energy products & services

Utilities are responding by using digital to deliver more from their existing business models


Infrastructure security

Customer desires

Shareholder expectations

Policy objectives

RiskTrust

GrowthChoice

Efficiency Conservation

Low carbon

ROIC Growth Certainty

Stimulate innovative services

Decarbonize energy supply

Transform the energy network

However, broader stakeholders are putting utilities under pressure to transform their business models…to meet needs like more innovative services, lower carbon, and more agile and responsive energy networks


The ‘power plays’ are reflecting the parallel drives to reduce carbon, optimize distribution and innovate for customers

GenerationMarket

Operations Transmission Distribution


Low-carbon producersGrowth in low-carbon energy assets

Distribution platform optimizersSystem optimization, efficiency and utilization

Solution integratorsInnovative customer solutions and services

As utilities transform their business models, three alternative ‘power plays’ are emerging


MARKET MODEL – Energy system optimization

REGULATORY FRAMEWORK – Outcome-based incentives

BUSINESS MODEL

OPERATING MODEL

WORK CUSTOMER MODEL

New roles, scope, and

differentiating STRATEGIES

Reform structures and

operating CAPABILITIES

Adopt fundamentally new operating PRACTICES

Transform the interaction model &

RELATIONSHIP

Whichever plays a utility chooses, it will need to transform its business model to become truly digital


Source: Accenture Digital Performance research, 2016.

Disruptors

Europe UtilitiesUtilities (average)

North America Utilities

Digital activity - internal

Dig

ital a

ctiv

ity -

exte

rnal

Shape customer expectations

Redefine capacity

Create shared value

Enable optimal pricing

Drive low cost service models

Utilities are using digital capabilities to drive performance within their current business modelsYet only a few disruptors are making the leap to become fully digital


GenerationMarket

Operations Transmission

Distribution


Asset life-cycle management

• Asset performance management• Digital field worker• Smart asset planning

Customer & demand integration

• Energy management• Digital customer interactions• Solution integration

Lifestyle & uses

• Living services• Industrial services• Municipal services

Grid optimization & aggregation

Energy aggregation

• Supply & demand management• Energy storage integration• Real-time network control

Interoperable devices

*Source: Digital Transformation of Industries: Electricity Sector, World Economic Forum and Accenture, 2016.

The reward from a digital transformation of the utilities’ business model is enormousThe potential value from rapid digital transformation for the industry is US$1.3 trillion by 2025*


Shift capital to strategic grid assets

Build an innovation ecosystem

Innovate in the regulatory model

Scale digital plays with the customer

Use corporate venturing

Utilities need to innovate around their business models as a matter of urgencyInvesting in no-regrets capabilities today will drive success tomorrow


VisitFor more information on the Accenture utilities, visit www.accenture.com/utilities

About AccentureAccenture is a leading global professional services company, providing a broad range of services and solutions in strategy, consulting, digital, technology and operations. Combining unmatched experience and specialized skills across more than 40 industries and all business functions—underpinned by the world’s largest delivery network—Accenture works at the intersection of business and technology to help clients improve their performance and create sustainable value for their stakeholders. With more than 373,000 people serving clients in more than 120 countries, Accenture drives innovation to improve the way the world works and lives. Visit us at www.accenture.com.

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The Transformational Play for Utilities