Dive Brief:
- 94% of industry executives expect a "important changes" to or a "complete transformation" of the electric utility business model, according to a new study by Pricewaterhouse Coopers.
- 57% of those surveyed said there is a "high" or "very high" chance that distributed generation will force utilities to reshape their business models.
- 82% view distributed generation as an "opportunity," rather than a "threat."
Dive Insight:
Everyone knows the great business model transformation is coming. What we don't know is exactly how it will play out. One thing to note is that utility revenue streams are largely tied to regulatory models. As a result, there is added pressure on regulators and policymakers to incentivize change. Some in the industry argue that regulatory models must change before utility business models can evolve to the point where they are able to survive the coming disruption.
More surprisingly, the vast majority of execs surveyed view distributed generation as an opportunity, despite (or perhaps due to) many seeing it as the spark that will effectively blow up utility business models. The evolution to a decentralized grid is imminent and these statistics show utilities know that resisting change is futile. If utilities don't view distributed generation as an opportunity, others will.
“Power utility companies will need to respond to these changes to not be eclipsed by technological and market change, while strategies that identify the best revenue opportunities in a changed and potentially transformed future market landscape will be key to survival,” said Norbert Schwieters, global power and utilities leader at PwC.
