2017 was a tumultuous year for the utilities industry. Energy and utilities companies must now address two seemingly contradictory requirements: the need to innovate and the need to economize. Accompanying these long-term drivers, five trends will shape the energy and utilities landscape in the coming year: the rise of renewable energy techs and companies (RenTechs), the growth of self-powering communities, developments in battery storage solutions, the role of AI and robotics in consumer expectations, and the move to u2es.
Prediction #1 – Energy markets will be challenged by the rise of RenTechs
The term “RenTech” may not be familiar to many yet, but it essentially describes the disruptive impact that renewable energy technologies and companies are having in the energy industry. In order to provide a clearer definition of the role a RenTech plays and how it is impacting the industry, perhaps the best place to begin is to think about a completely different industry that has already undergone disruption—Financial Services.
By now, we’re all accustomed to hearing the term “FinTech,” which describes businesses that employ technology to bring new and innovative financial services to consumers and businesses in any number of areas ranging from payments, insurance, and personal financial management. The rise of FinTechs had a disruptive and surprising effect on the Financial Services industry which traditionally relied on established financial institutions to provide these types of services. Just as FinTechs had a disruptive effect on the Financial Services industry, so too are RenTechs disrupting the energy industry.
We are beginning to see firms such as Google, Amazon, Apple, Walmart and other corporate giants entering the energy playing field. Whether in response to cost savings, or green energy and climate change initiatives, or both, large tech companies are already building or buying their own solar and wind farms to become 100% green, satisfy their business’ energy needs, reduce their dependence on traditional energy suppliers, and even sell surplus back to the grid. This represents a potential disruption within the energy industry. Having already built their own generation facilities to meet their business needs, these RenTechs could pivot into a role as an alternative energy supplier.
Of course, established utilities also invest in renewables development. Nevertheless, the impact of tech giants, corporate giants and start-ups will increasingly play a role in the generation mix and ownership, disrupting long-standing business models and force us to reimagine the energy market.
Stay tuned for four more energy and utilities trends and predictions for 2018 from Capgemini’s Perry Stoneman.
Updated: Discover predictions 2 and 3 in the next blog.