How energy consumers are creating opportunities
As more consumers control how they use, store and sell their energy, companies and governments must adapt business models based on a better understanding of customers’ evolving expectations. We asked our panel if tomorrow’s energy companies present an opportunity or pose a threat, and what the implications are for energy companies today.
At EY World Entrepreneur Of The Year™ 2019, mold-breaking entrepreneurs explored how to prepare for the NextWave of industries as new technologies fundamentally change traditional ecosystems and business models.
Here are some key highlights of the discussion:
- Energy generation is moving off the grid. As technology advances and costs continue to drop, increased off-grid generation (e.g., through rooftop solar photovoltaics), electric vehicles (EVs) and battery storage will lead to a decentralized energy future by mid-century. Over the next 10 years, distributed energy resources are expected to grow eight times faster than traditional generation globally. Self-generation is a good commercial fit for companies hedging against rising power prices.
- Climate change needs to be addressed. All countries must take action because this issue affects everyone. In particular, CO2 and methane emissions pose a big threat that is often overlooked. While there has been progress in decarbonizing the energy sector, more needs to be done.
- Green energy is becoming more competitive. Costs continue to fall, and renewables are now cheaper than new — and, in some cases, existing — fossil fuel generation. In some markets, renewables are now competitive on a non-subsidized basis. More needs to be done to give renewables the right incentives to meet long-term climate ambitions.
- Entrepreneurs can help shape major public policy issues. Energy is a science, based on facts and figures; however, these facts are frequently twisted or misinterpreted. Ideally, the sector would be depoliticized, and entrepreneurs — who are always seeking solutions to problems — would lead the way. Of course, the nature of the industry means regulation is essential. Governments should aim for an appropriate balance between security of supply, sustainability and affordability, while enabling and rewarding innovation.
- We’re more than ready for energy-efficient solutions; we just need to deploy them. Existing technologies are powering alternative sources of energy. Solar, wind and batteries have existed for a long time. Only by using them will we force widespread change.
- Traditional energy companies aren’t evolving as quickly as they need to. Incumbent energy companies are slowly responding to changes in the industry, but technology and the emergence of agile, new market entrants are outpacing them. And although digital-savvy consumers show promise, their adoption of green energy has been slow. Educating and empowering them is a critical step in meeting our climate ambitions.
- Innovation will continue to drive the energy sector, which is constantly evolving. Companies and governments have to stay agile and encourage innovation, through such new technologies as artificial intelligence, data analytics and the use of lithium, when considering their long-term energy strategies.
Thank you to our discussion leaders:
Rebecca MacDonald, Founder and Executive Chair, Just Energy, Inc., and EY Entrepreneur Of The Year 2003 Canada
Dr. Christina Lampe-Önnerud, Founder and CEO, Cadenza Innovation
Benoit Laclau, EY Global Energy Leader