I had the pleasure of listening to Marie-José Nadeau, Chairman of the World Energy Council, speaking around the future of the energy sector last week in The Hague.
Pressure to decarbonise energy, the rise of renewable energy, new business models rising from the digitalisation of the power sector and increased smart technologies across the entire energy sector are just a few of the factors driving and influencing the energy transition.
The electricity sector is in the midst of a profound transition, particularly on the customer side. “Increasingly, customers are becoming empowered by choices which previously did not exist, not just the choice of energy supplier, but also the ability to produce their own electricity,” Nadeau told the audience of professionals from the oil, gas and power sectors.
“Technology is changing the landscape, and in the process, is challenging business models and providing new opportunities for non-traditional players. The evolution of technology at ever accelerating speeds, the rising awareness for social and environmental sustainability, and the global consensus on the importance of reducing carbon emissions are translating into fundamental shifts.”
The energy transformation is already taking place in many developed nations, but will inevitably take place throughout the world and along all elements of the energy chain.
“This transformation, driven by the increase in renewable energy and the closure of coal and nuclear assets around the world, is already eroding the bottom line of many corporations,” Nadeau continued.
“These changes and their implications for electricity utilities will impact on revenue as well as investor returns. In many developed economies, the financial consequences of the energy transformation have been severe, forcing utilities to dispose of assets and reduce capex in order to manage their financial balances and ratios.”
All this is well known, but perhaps the question that needs to be answered is this: Now that the energy sector is entering into unchartered territory and the rules of the game are changing – how are utilities continuing to drive a business proposition that both drives growth and creates value?
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