The narrowing window for energy transformation

Time is running short to prepare for new energy markets

The global energy transformation is gathering pace, driven by the twin forces of changing customer expectations and rapid technological evolution. In response, companies must undertake a strategic shift to prepare for new energy markets.

Yet 82 percent of utility executives in our latest Global Power & Utilities Survey say their company is not yet ready for the transformation. In the meantime, new players from outside the sector are sizing up opportunities in energy markets around the world.

To understand how companies are viewing this window of opportunity, we’ve canvassed over 115 industry leaders from 55 countries for their views on how these forces will affect energy markets. We’ve summarised our results across four key issues below.

The convergent effects of technological advances, policy measures, the growth of distributed generation, new forms of competition and changes in customer behaviour are transforming power markets around the world. While the pace of these changes varies from market to market, it is clearly accelerating at a speed beyond what leaders thought possible just a few years ago.

No component of the value chain – from upstream generation, through grid and network operations, to beyond the metre – will be unaffected. While there is an awareness that more agile business model thinking is needed for utilities to adapt to this changing environment, that awareness hasn’t necessarily translated into action. Only 18% of utility company executives say that their company is ready for market transformation. A further 38% expect their companies to be ready by 2020, which is to say, a slim majority of companies are expected to be prepared in two years.

Transforming your organisation for the future

What should companies do now to take advantage of the narrow window of opportunity for change? The temptation for companies grappling with the issues identified in our survey is to embark on a wholesale transformation initiative. But such efforts often fail, and tend to come in over budget and beyond the deadline. And, in the meantime, the outside environment has moved on and changed.

If companies are to transform successfully, they need to develop an ongoing mastery of change, in which adaptability feels natural to leaders and employees. But this continual adaptability and agility needs to be rooted in firm foundations.

Five issues emerge from our survey as key building blocks for power and utility companies:

Contact us

Sacha  Winzenried

Sacha Winzenried

Director, PwC Indonesia

Tel: +62 21 509 92901

Antonius  Sanyojaya

Antonius Sanyojaya

Partner, PwC Indonesia

Tel: +62 21 509 92901

Joshua R Wahyudi

Joshua R Wahyudi

Partner, PwC Indonesia

Tel: +62 21 509 92901

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