Utilities face an increasingly challenging environment that presents both opportunities and risks.
Worldwide, utilities find themselves buffeted by wave after wave of change. The source of the turbulence: shifts on the regional and global scale as well as in the public and private sectors. As initiatives for a sustainable energy mix evolve, utility companies that invest wisely position themselves to benefit from the changing industry landscape.
To remain competitive over the next decade, utilities will need to make significant investments and have focused efforts to renew and expand their generation capacity, improve operational efficiency and retain and expand their customer base. Decisions will require tough choices due to several new realities, including:
- Increased competition
- New and evolving technologies for improved energy efficiency and storage, distributed generation and smart grid and metering
- Limited subsidies due to government budget constraints
- Continued regulatory environment that mandates CO2 abatement
- Customers’ concerns about the environment and their increasing willingness to switch suppliers
- Pressure on utilities’ balance sheets and cash flows
Bain works alongside utility companies, at all levels of the organization, to evaluate the risks and opportunities inherent in these trends and constraints. We work with our clients to prevent and remedy the pain points and maximize business value by taking full advantage of underlying opportunities.
Utility leaders will benefit from optimizing their core business and thoughtfully evaluating adjacent opportunities.
Companies that successfully generate growing revenue and profit focus first on achieving full potential in their core businesses—in terms of both scope and performance—and then pursue a disciplined expansion into attractive adjacencies.
As it pertains to their core business, utility leaders seeking to achieve full potential need to:
- Frame their generation investment strategy under uncertainty
- Develop field force effectiveness
- Build customer loyalty
Beyond their immediate core, areas such as energy efficiency and distributed generation open up new opportunities. Our energy consultants can help identify dependable, low-risk adjacencies with favorable economics to invest in—and how to tradeoff and integrate them with the core business initiatives.