Six actions to turn soaring energy demand into lasting prosperity

Reinventing the business energy experience through collaboration across sectors can lead the way to true energy prosperity that delivers growth, affordability, sustainability and resilience all at once.

Global electricity demand is expected to double in the next 25 years, with three quarters of this growth to be driven by businesses.¹ The impact of generative AI (GenAI) on electricity consumption tends to grab the headlines, and it’s true that this is a big driver. But, alongside technology, natural resources and manufacturing are also leading the growth wave. And eight out of 10 businesses surveyed expect their electricity consumption to increase in the next three years, with over half across most sectors anticipating a rise of more than 10%, with demand driven by new equipment and electric vehicles (EVs), as well as tech and artificial intelligence (AI).

This is a “now or never” moment for providers. Those that take decisive action to reinvent the business energy experience can capture new revenue opportunities and enable growth that benefits everyone. Those that wait will fall behind in a race where new entrants and businesses themselves are setting a faster pace.

The definition of an energy provider is broadening beyond the traditional utility. Now that energy is every business’s business, more companies from diverse sectors — technology, financial services, mobility and beyond — are entering the sector, often with a fresh take on energy solutions. Automakers have been among the quickest to move. For example, Swedish EV company Polestar has created an app that gives individual and fleet customers across 11 European countries the ability to easily automate and manage EV charging, guiding them to tap directly into grid rewards.²

Businesses know that energy is critical to their future success. Of businesses surveyed, seven out of 10 (71%) have set a comprehensive energy strategy, with clear actions and investments aimed at achieving results.

Not surprisingly, these strategies prioritize affordability, but they also indicate that businesses are seeking broader confidence in their future energy prosperity. Stability of supply amid disruption is important, and 64% of businesses say volatile energy costs are already impacting profitability. Access to energy to fuel their growth is also a top issue, with 66% of businesses worrying about whether they will be able to get the energy they require to meet future needs.

Businesses are moving quickly to meet their intertwined energy and growth objectives but are held back by a slew of barriers. Organizations surveyed told us their top three energy challenges are financing and costs, complex regulation, and energy providers.

It’s discouraging to see that energy providers are themselves named as a top roadblock on the path to energy prosperity, and this sentiment is common across all sectors. But opportunities are on offer for those ready to break down barriers they’ve helped build.

Businesses are keen to meet their challenges head on, particularly as two-thirds expect their energy needs to become more complex over the next three years. They are actively developing energy expertise, including through building internal capabilities but increasingly through partnering and outsourcing.

97% of businesses plan to grow energy expertise in the next three years by:

This is a significant opportunity for energy providers, but they will first have to prove their worth, particularly as businesses build their expertise and turn to new entrants with sharper value propositions. Already about one third of businesses are not confident that their provider adds value, and 74% say traditional customer service approaches offered by their provider are no longer good enough.

It’s time for providers to rethink the service they offer — and to whom it is offered. In today’s businesses, energy is everybody’s business. Broader relationships that engage different people (across operations, finance, legal, HR and beyond) with business-centric energy solutions, potentially in partnership with other providers, can meet more diverse and sophisticated needs.

When asked to rank their energy needs, sustainability is a high priority for businesses (ranking a close third behind reliability and affordability). Nearly all businesses surveyed (99%) have set energy goals that center on increasing the use of carbon-free energy and reducing overall emissions.

But businesses won’t sacrifice green for growth. While many companies will pay a premium for access to renewable energy, energy infrastructure and faster connections, they expect customized solutions that meet their own needs. The desire to take control of their energy future is driving more investment and a push for self-sufficiency and control. Two-thirds of businesses say they’ll invest or expand on-site power generation and battery storage in the next three years.

This broad range of planned investments will call on a diverse ecosystem of participants. Will energy providers be star players — or sidelined? Businesses tell us that they will continue to turn to energy providers for renewable energy and green natural gas but prefer other providers for everything else. Energy management companies, specialized solution providers, energy services companies and equipment manufacturers are poised to take a bigger role.

One way to build the ecosystem is through taking a team approach. US-based utility AES operates across 15 countries, supported by a global ecosystem that helps bring smarter energy solutions to business customers. AES has shown a willingness to work with different partners in different ways to meet different customers’ needs. For example, the company has collaborated with Siemens to create Fluence, which offers battery storage designed for industrial applications. AES’s investment in Uplight, a cloud-based energy efficiency provider, has led to new digital engagement platforms that help businesses and residential consumers manage energy. A partnership with Google has seen AES develop a 24/7 carbon-free energy solution that powers Google’s Virginia data center. And, by joining forces with Australian solar company 5B, AES is helping business customers accelerate faster access to more renewable energy.

It's an example of what happens when energy providers reframe their view of organizations in adjacent, or entirely different, sectors as collaborators, rather than competitors. Smart alliances better support businesses to meet their energy ambitions in a sustainable way, while helping providers secure their own future. Balancing growth and green ambitions to realize energy prosperity will require everyone to play their part.

We’ve identified four potential roles for providers that can help them realign their organization around business customer needs:

• Core energy operator: Providing options with simple rates, choice of source, and programs tailored to business needs
• Energy transition advocate: Actively supporting business customers to understand and adopt clean energy solutions, with advice and help to access the right products, services and incentives
• Energy platform orchestrator: Providing the platforms, technology and support to help businesses control and optimize use and costs
• Specialized solution provider: Offering a range of energy-related products and services individually or bundled together (e.g., solar panels, battery storage and energy-as-a-service)

Depending on their own solution portfolio, operational model and markets, providers could choose one role, or a mix of roles, or move from one to another over time. For example, an energy transition advocate may become an energy platform orchestrator as energy markets evolve and greater value emerges in energy flexibility.

No role is better than another, but businesses do have different views of their value. Almost half (42%) are most attracted to an energy transition advocate while nearly a quarter (23%) want their provider to play a more traditional role of core operator.

With only about one third of businesses (35%) open to energy providers offering platform orchestration and specialized solutions, it will be up to providers to fundamentally reinvent themselves if they want to take on these roles. Collaboration, in particular, will become critical, with successful providers working seamlessly across a growing network of stakeholders to orchestrate energy solutions and offer specialized, value-added products and services.

Reshaping the future of energy

Energy is every business’s business. Their drive to grow, decarbonize and compete is increasingly centered on energy, and they are ready to invest more time and money to get the energy experience that aligns with broader goals.

Meeting these higher expectations is a challenge for providers, but also an opportunity to realize value from long-awaited demand growth. Providers that take bold action to engage, collaborate and innovate across a broader energy ecosystem can build a business energy experience that fuels economic growth and ultimately delivers an even more substantial legacy. An energy system that aligns growth with affordability, sustainability and resilience can unleash true prosperity and shape a more resilient energy future.

Six actions to take

1. Get to know business customers in a whole new way: Move beyond sector, consumption and geography to understand the diverse drivers of needs and expectations.
2. Reinvent business account managers as energy success managers: Empower managers to offer tailored recommendations to business customers, track trends and break down traditional organization silos to help make energy a competitive differentiator.
3. Deliver digital differentiation: Develop tools that bring proactive insights and advice alongside AI-enabled interactions for self-serve, education and analysis.
4. Focus on the “neglected middle”: Overcome the barriers that stop ambitious mid-sized organizations from making their energy goals a prosperous reality.
5. Define your role in driving energy prosperity: Create a decisive forward-looking plan to support the organization’s vision to meet the needs of businesses and capture new value. Identify technology and capability gaps and determine how to fill them (e.g., build, buy, ally).
6. Build a business energy ecosystem: Partner with other organizations to develop and enable innovative solutions that better meet different business customer needs.

Summary

New EY research reveals that businesses see energy as a competitive advantage but need help to get an edge. Providers that act now to reinvent the business energy experience can meet customers’ higher expectations to unlock revenue growth and shape a new age of energy prosperity. But success will require bold action and a willingness to collaborate and innovate across a broader energy ecosystem. Four areas of focus can help providers choose a way forward.