Capgemini Portugal

World Energy Markets Observatory: Transformation

As the energy sector grapples with the effects of the global pandemic, a transformation strategy based on the shift to (energy) services is no longer the most viable growth opportunity. Organizations operating in this so-called “new normal”— one marked by financial pressure, market volatility (which requires increased agility), digital transformation acceleration and the prioritization of energy transition—are required to revise their strategy and positioning to address these new challenges and shifting priorities.

This year’s World Energy Markets Observatory (WEMO), Capgemini’s annual thought leadership and research report that tracks the development and transformation of energy markets around the world, shows a landscape much changed as the most advanced organizations rally around the common priority of energy transition. In this year’s report, we highlight this shift in the transformation strategy through a series of examples, two of which we review here to demonstrate how organizations can transform at speed and at scale in a highly disrupted and volatile environment.

Ørsted: The shift to wind pays off

Ørsted, now a Danish multinational power company (formerly the state-owned Dansk Olie og Naturgas A/S (DONG), is one of the industry’s most prominent reinvention stories. Over the past ten years, the company has divested from its oil and gas roots to become one of the world’s largest offshore wind producers.

Our analysis indicates that Ørsted’s decision paid off financially. In the past 36 months, the company’s market cap more than doubled from less than $20B in November 2017 to more than $50B in July 2020. The company went from being a hyper local national oil company (NOC) to a renewable player with about the same market capitalization as an O&G major, such as BP.

Today we see signs of continued innovation and shifting priorities to enable the organization’s transformation:

Engie: Shifting business priorities in the COVID era

Another recent example of shifting business priorities comes from Engie, a French multinational electric utility company. Over the course of 2020, the company has made a series of decisions that signal shifting priorities (networks and renewables) and a new growth strategy. Now under the responsibility of renewed management, the organization has taken several bold steps to reorganize and reprioritize in order to embrace sustainability and address many growth challenges.

Charting the course: Determining new areas of investment and demonstrating the ability to scale

As companies emerge from the COVID-19 pandemic, their growth strategy will be anchored in the idea of energy transition. In this year’s WEMO we urge companies to think of the transformation journey in three main steps:

1. Strategy: Identify one or more key areas of
investment, aligned with the company’s renewed
sustainable mandate

2. Divest: Sell off stranded assets and eliminate noncore
activities for the future

3. Scale: Execute at speed and scale in order to lead
the competition

To learn more about transforming in the wake of COVID-19, download a copy of the 2020 WEMO report or reach out to one of our authors today.

A perspective from our Capgemini expert:
Philippe Vié, Vice President and Sector Head for Energy, Utilities and Chemicals

To review the full findings from the22nd Edition World Energy Markets Observatory, download a copy of the report today. Download Now

Exit mobile version