Opportunities and risks for electricity generators, retailers and network operators

Electricity systems are going through an unprecedented transformation. The rise of consumers producing and exporting their own electricity, battery storage, smart devices, microgrids that co-exist within the grid, new energy service players and innovative business models are fundamentally changing the way the power system operates - both technically and commercially. Much of the change will occur at the distribution network level ('grid edge'), driven by new technology enabled products and services.

Today's major industry players will need to adapt to this changing environment through new value propositions and business models, or face the prospect of stranded assets, declining profitability and value erosion. The impacts on institutional investors could be significant.

E3 track record

Our work in this sector has included:

• assisting an electricity and gas utility to understand the resourcing implications of  becoming an 'utility of the future'
• advising an electricity retailer on the implications of the 'Expanding competition in metering and related services' rule change, potential market scenarios and strategy options
• advising an electricity network operator on (a) the changes to the current regulatory framework that are required to facilitate demand management (DM) and distributed generation (DG) for network purposes, and (b) what business model would enable the implementation of DSM and DG initiatives within that regulatory framework
• developing the financial case for embedded generation in place of conventional network expansion, and examining the organisational implications of building a new distributed generation business for an electricity distributor
• developing a business model within an electricity distribution business (retail and network) for setting up a new energy service business.

Case studies

Electricity network operator: building a demand side management and distributed generation business.

Note: client names have not been disclosed due to confidentiality arrangements.