There are huge shifts in renewable energy, customer demands, microgrids, blockchain, and decarbonizing systems. Below is a brief taste of what these shifts are and what they mean along with some further reading.
Renewable energy has grown up and matured, becoming its own industry rapidly. Renewable deployment has gone from less than 20 billion a year 10 years ago to 200 billion a year recently. Cost not climate is driving transition.
In the U.S. alone, solar costs have fallen more than 90% over the past decade and installed capacity is up more than 10-fold. In general the electricity sector is seeing the fastest growth, expecting to provide almost 30% of power demand in 2023 and more than 70% of global electricity generation growth. Renewable energy sources for heat and transportation are next in growth forecast for the next 5 years. Charts here.
Studies have shown that high customer experience measures amongst utilities providers has a direct correlation to customers:
- Staying with a provider (20%)
- Recommending (37%)
- Overall Satisfaction (22%)
Leveraging these future technologies as they become mainstream will be important differentiators to customer experience:
- AI as a tool to maintain customer experience
- Hyper-personalization based on usage and trends
- Segmenting technology and decision making to value and/or growth
Renewable energy like solar and wind help solve a problem but are weather dependent. Enter the microgrid a more reliable, greener, and resilient energy source. A microgrid in its most basic form is a combo of power sources, users, connection, and a control system. Great breakdown here.
Some microgrids in remote areas operate independently (faster connectivity to remote areas than large centralized grids).
Some "silo" off of main power grids (flip a switch to turn them on in the event of a blackout)
In the future microgrids will even be able to integrate renewable energy, be 99.999% resilient or nest within other microgrids.
Imagine a world where you become your own utilities company and maybe for a few of your neighbours as well. That future is something utilities companies are preparing for. Amongst other uses Blockchain is also being explored in the utilities sector as a way for consumers to produce and sell electricity- all tracked through blockchain technology.
One example is the Brooklyn microgrid project. Where each person living within this community being powered by the microgrid where asked to invest in a computer along with solar panels. This computer would act as a "node" in order to be able to sell power to their neighbours. Check it out here.
A group of long term institutional investors representing 1.8 trillion dollars globally, recently called upon the top 20 publicly traded energy generators to commit to recommendations for achieving net-zero carbon emissions by 2050. Read their letter here.
This ask is lighting a fire under some of these top 20 energy generators who are looking at tools to help decarbonize fast.
- Integrating renewables and distributed energy resources via transitioning to a decarbonized grid supported by non-wires solutions (NWS) like energy storage, energy efficiency, and demand response
- Retiring uneconomic assets via "coal securitization-closing coal plants before their scheduled retirement date and allowing utilities to recoup the remaining depreciation by creating a bond-link instrument."
- Reforming business models More here.
The utilities and energy sector has some real challenges ahead of it. Challenges that are creating exciting opportunities, and new modes of engagement with their consumers. It's an exciting time and an opportunity for companies to change the way see and participate in the utilities market globally.
Our next mailer is coming out a bit sooner than usual and will be covering some of the exciting demos we saw during our tour of the innovation section of the IUEC 2019.
As always if you found this interesting or useful. Please share!