Business Energy Providers

Tim Porter-Accenture

Traditional energy providers operate in a highly dynamic environment. Competition is increasing from threats both expected and unexpected, all while consumers continue to gain unprecedented power. What are the forces making waves for utilities? What are the most critical consumer trends? And, what are the strategic plays energy providers can adopt for new and shifting value pools?

New challenges energizing new ventures

Accenture sees three major forces setting the stage for opportunities and challenges:

  • Infinite disruption. With technology change accelerating on all fronts, energy providers can count on disruption from the platform economy, distributed energy technology, and intelligent and connected automation. Also in the mix is the increasing cooperation among players both inside and outside the industry.
  • Market volatility. Growth is no longer a given. As energy-efficiency products and programs prevail—and general economic volatility looms—many providers face continued decline in energy demand.
  • Regulatory reimagining. Regulators are asking more of utilities and conversely, utilities are asking more of regulators, when it comes to customer service, customer choice and support for new energy products and services.

These forces are disrupting the traditional energy value chain—creating more “asymmetrical” competition from non-traditional players seeking to offer consumer-centric energy products and services and other home management services. At the same time, specialized energy service providers pose growing threats as they continue innovating in how they understand and engage with consumers.

Energy—their way

The consumer is at the center of these challenges and changes. Accenture’s New Energy Consumer and cross-industry research point to four trends crucial to containing costs and improving profitability:

  • Instant. Time-strapped consumers want on-demand experiences that simplify their lives.
  • Relevant. Consumers want personalized interactions and value-curated experiences. Some will even pay more for it.
  • Meaningful. For certain consumers, what they buy has become an expression of who they are—a way of highlighting their personality and beliefs.
  • Sharing. In this era of open and collective business models, consumers welcome ways to share their homes or energy products and services—which delivers benefits without the burden of ownership.

How will you play?

In the face of market, technological and regulatory changes—and evolving consumer trends—Accenture sees three primary consumer energy provider plays for the next five to 10 years:

  • Commodity-Centric Supplier—“lean and automated” low-cost provider
  • Energy Marketplace Enabler—facilitator of relationships and transactions in the energy system
  • Connected Lifestyle Provider—partner of choice for the collaborative and connected home of the future

We believe that most utilities will ultimately adopt elements of all three plays. The key: achieving the appropriate balance to align with evolving customer values and market forces.

Looking ahead, we see a fourth play—Energy Ecosystem Disruptor—as a trend to understand as digital transaction processing, open platforms, bots and artificial intelligence continue to progress.

Above all, we see a commonality across all of the business plays: Every energy provider needs to transform around a digital operating model founded in people-oriented design. Stay tuned for the latest New Energy Consumer research, where we’ll explore the latest consumer trends, what they means—and suggest some “no regrets” investments that will lay the foundation for success.

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