The pace of technology-driven change is accelerating well beyond the speed the power sector believed possible. No aspect of the value chain – from upstream generation, through grid and network operations to beyond the meter – is unaffected. The utilities sector will develop very different performance roles, technology landscapes, customer platforms and business models than those that served it over its first 100 years. From a scale-driven, centralised and standardised model, the sector is set to evolve to one that is digital, distributed and personalised. Technology economics will drive part of this shift and be complemented by changes in customer behaviours that reshape the provider–consumer relationship. Those companies that recognise and embrace this shift will find success as a valued, innovative solutions provider to their customers and partners. Those that fail to recognise this new technology-driven market model will find themselves forfeiting their natural rights to grid enhancement and to the customer relationship.
We will revisit these questions later in this report and share perspectives for utility executives to consider as they think about the impact of disruptive technologies on the future of their business. In this report we look at the technologies that are likely to drive disruption and change in the utilities sector over the next 20 years and what they mean for incumbents and new players in the market. Much of our focus and examples come from the United States but the trends and changes described are applicable to many other parts of the world as well.
The report is part of a series of PwC initiatives looking at the impact of energy transformation. In an earlier report, The Road Ahead: gaining momentum from energy transformation, we discussed the various market and business models that could emerge. This was followed by Customer engagement in an era of energy transformation in which we examined how the energy ecosystem is evolving and the implications for customer strategy. In this latest report we look at the scenarios that could arise from the fast pace of technological evolution. We paint a picture of how five possible future scenarios (among many possibilities) could unfold and affect utilities as technology evolution pushes forward. And we conclude with a look at what it will take to win in tomorrow’s market and, in particular, the need for utilities to think very differently about how to embrace innovation as a market enabler.
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