PA Consulting Engerati 2018 Energy predictions

2018 - Predictions for the utility sector

What technologies and trends will shape the energy sector in 2018? Engerati takes a look.
Published: Thu 28 Dec 2017

To identify the forces most likely to impact distribution system operators and energy retail companies in the coming year, Engerati asked two experts in the field. Engerati CEO and Founder Adam Malik and PA Consulting’s Peter Siggins, Partner in the Energy Group.

Malik kicks off with a prediction around electro mobility. “This is probably the single most disruptive force in the entire new energy paradigm,” he states.

“The fact that you’ll have an entity - which I call a tri-node - that can charge, move and deploy energy will require a whole new situational awareness of what’s going on in the energy grid.

Malik believes electric vehicles (EVs) are already at an inflection point. “In 2018 we will see more announcements from EV manufacturers. And new European Union legislation will mandate that every car park of a certain size has EV charging posts.”

An interesting point is how the oil and gas community responds to that, he says. “At the moment those entities own the forecourt, which makes a lot of money especially with the retail relationships that they have. How will they react when they no longer have the pulling power of a fixed destination for car charging?”

Malik expects to see a lot more investment by the oil and gas sector into charging schemes and charging infrastructure. “And more attention being paid by grid operators in terms of how can they play within that space,” he adds.

Digitalisation means data  

On the subject of spotting new revenue streams, PA Consultancy’s Siggins predicts a continuing move towards a digital utility. “When people talk about digitisation, what they mean is data,” he explains.

“We’ll continue to see an acceleration towards the digital utility with energy companies getting their heads around the proliferation of data and developing new use cases such as incorporating flexible renewable energy sources.”

Siggins cites an example of New York Power Authority, which “has made bold statements about being the first digital utility in the US”. It will be interesting to see what that actually means in the coming year, he says.

In this Engerati video interview, Peter Siggins, Partner in the Energy Group at PA Consulting, discusses the four areas of change for utilities to future proof their business models; 'future worlds', innovation, customer outcomes and agility.

Utility customer in charge

A trend that will be felt by energy retailers is Customer 4.0, which Siggins defines as putting the customer central to the utility service model.

“Customer 3.0 was characterised as energy companies focused on customer experience and the delivery of customer service. However, this was irrespective of the customers’ needs.

“By contrast 4.0 will meet customers’ desired outcomes. What this means for utilities is they need to modify the products and services they deliver.”

Energy tech - blockchain

Malik sees blockchain a disruptive technology that will continue to “bubble up to the top next year” particularly around transactive energy - “where we start seeing the collision between the sharing economy and the energy economy”.

“People and communities are increasingly experimenting with buying local and from each other. We still the potential of these pilots tipping into the mainstream particularly where they’re trying to model out a value-back to the person providing the grid infrastructure.”

Malik explains: “One of the issues with peer-to-peer trading at the edge is who pays for the wire that is connecting the two peers? Once that is solved there will be probably quite high adoption of that.”

Electro mobility is probably the single most disruptive force in the entire new energy paradigm
Adam Malik, CEO and Founder, Engerati

Virtualising energy

Success in transactive energy will lead to a second notion of virtualising energy, says Malik.

“People who generate their own energy can carry it with them and use it to charge EVs. Or individuals living in urban areas who can’t put PV panels on their roof because they don’t have a roof are offered services where they can buy a virtual PV.

Siggins meanwhile expects the sector will see “more of the same” in terms of technology to make energy flexible, there will be a strong focus of more non-traditional energy companies getting into the utility space, predicts Siggins.

“This continued move and interest of non-traditional companies into the energy ecosystem will continue to unsettle the traditional incumbents. We’ll also see a tension between non-regulated services versus regulated energy businesses,” says Siggins.

Regulation for flexible energy

On the subject of regulation, Siggins expects it will be a busy year for regulation, particularly in the UK, with the electricity sector gearing up for the next price control period.

“There is a general trend to put increasing pressure on regulators to help solve the complex issue of change in the utility business model to accommodate flexible energy.”

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