P&U is transforming
Why yesterday’s business models won’t work anymore

EY - P&U is transforming
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You are reading an article from the Index of women in power and utilities series. To read more, visit the homepage.

This is a time of monumental change for the power and utilities (P&U) sector.  How energy is produced, who generates it, and how it is bought, sold and distributed is all changing – and all at the same time.

Society is also forcing this change. Consumers are increasingly dissatisfied with:

  • Rising energy prices
  • Aging infrastructure or lack of infrastructure
  • The environmental consequences of fossil-fueled generation.

Solving the opposing yet equally important forces of affordability, accessibility and environmental sustainability has created an energy trilemma. Change is happening today, not in some distant future – and it is having an impact on power and utility businesses across the globe today.

Drivers for transformation of P&U

 

Infrastructure investment

Infrastructure renewal and expansion is needed on a huge scale – current estimates show a US$17t investment is needed in global power infrastructure through to 2035.

Drivers for transformation of P&U

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Cheap renewables and distributed generation

The costs of delivering cleaner, smarter and more sustainable energy solutions have fallen dramatically and there is rapid growth in distributed generation (DG) and improved energy efficiency.

Drivers for transformation of P&U

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Empowered customers

Growth in DG, together with the rollout of smart meters and other digital devices, enables two-way data flow that gives customers more control over energy.

Drivers for transformation of P&U

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Digitization

Big data and analytics promise to transform and unlock significant competitive advantage. Customer and grid analytics will make sense of vast amounts of data from smart meters to help improve processes and business intelligence.

Drivers for transformation of P&U

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Market reforms

Political will is a proven catalyst for sweeping change, and many energy markets are set to undergo major reform in the next few years.

Drivers for transformation of P&U

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Regulatory and policy frameworks

New environmental rules and the low-carbon agenda demand that P&U businesses build more effective relationships with policy makers and regulators.

Drivers for transformation of P&U

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Competition

Lessons learned from other industries that have faced disruptive change include a willingness to adapt business models, develop new approaches to risk and embrace innovation.

Drivers for transformation of P&U

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Aging workforce

The P&U sector is facing enormous human capital risks with a significant number of workers nearing retirement age in many countries. Their vast knowledge – built up over decades – will not easily be transferred to the next generation.

Drivers for transformation of P&U

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Source: EY research

The biggest impact of these changes is that traditional business models need to co-exist and co-evolve with increasingly decentralized models.

We simply can’t meet the trilemma of security of supply, affordability and sustainability with the old model alone.

Utilities need to embrace a culture of innovation and entrepreneurship with a willingness to adopt the best ideas – wherever they come from.

We need diverse thinking in and out of the boardroom. To succeed, we need to bring in and develop new skills and approaches. And one pool of talent that is currently untapped is women.

 

Read the full report.


Read related articles from the Index of women in power and utilities.

Winning the war for talent: tapping into the potential of women Diversity: P&U versus other industries More women on boards: what governments are doing Both men and women are needed to achieve change
EY - Winning the war for talent EY - Diversity EY - More women on boards EY - Both men and women are needed to achieve change

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