Energy suppliers
Energy suppliers are faced with increasing churn due to deregulation, European consolidation and customer awareness. This implies that both incumbents and new entrants are facing serious challenges in servicing, developing and retaining customers.
As a consequence energy suppliers are facing margin pressure, hence many energy suppliers are introducing new innovative marketing propositions, renewable energy offerings, energy management services and domotica.
The changed business environment of the competitive market means that energy suppliers have to adapt their business model to take full advantage of the new opportunities it brings: quality of service and, at the same time, focus on reducing operational costs and growing of market share. The penetration of distributed generation is increasing in most electricity markets and it is expected that this development will continue in the near future. Generally, three policy goals can be distinguished that drive their growth: the reduction of greenhouse gas emissions, the use of renewable energy resources and the energy efficiency improvement.
For energy suppliers, the development of new business strategies and new revenue drivers is nowadays a more ‘natural’ process. Suppliers act in a market that is exposed to competition and that is not restricted by regulation. The dynamic working of this competitive market forces market players to continuously develop new revenue drivers and to display a certain degree of innovation. It gives incentives to improve margins and respond to market challenges. Only market rules (e.g. balancing market, power exchange) may be experienced as boundary conditions to the energy supplier’s business. The increase of electricity supply from distributed generation is an opportunity for energy suppliers to extend and improve its business. A new business concept for energy suppliers related to the growing penetration of distributed generation is, for example, the operation of a large number of small electricity generators as if it is a large power plant, a virtual power plant.
Grid operators
Grid Operators are faced with unbundling of activities. Furthermore their focus moves from a pure asset and field service oriented company towards a company facing new issues related to renewable energy, such as introduction and roll-out of smart metering. 'Co-generation' also leads to grid load balancing issues.
The increasing share of distributed generation influences the arrangement of the power system and, in combination with regulatory issues, may negatively affect the business of the grid operators. Because distributed generation units are located closer to demand than central generation, increasing distributed generation may result in decreasing revenues for the grid operators, as less transport is needed to deliver the produced electricity to the customer. But is also may lead to increasing costs. Distributed generation units are mostly connected to the distribution network at low voltage levels; sites that were originally not meant to connect power generation facilities. This new situation can create several problems for the distribution networks in terms of stability and power quality. The more distributed generation is connected to a particular distribution network, the greater the challenge.
Therefore, grid operators have to change their business focus in order to keep their business lucrative. Transportation of electricity must not be the only revenue source. There are other activities that create value, and that, at the same time, make grid operators less vulnerable and dependent on one revenue source. By developing new business activities, thereby diversifying the business model, and by changing networks into active networks, the grid operator can overcome the decreasing transport revenues.
Solution map
Metering companies
Overseeing the energy value chain the only one well equipped to energy advice is the meter company. Neither the supplier or the grid companies can fulfil this role, because their objective is to sell energy or to optimize the energy flow in the grid.
However, for well executed energy advice the end-user needs to have a smart meter. The meter company faces the problem of convincing the end-user of the added value of the Smart Meter and has to set up a communication infrastructure for metering and distribution of meter data..
The roll-out of smart meters however is a complex program: it is time consuming, the penetration is still low and – most importantly - depending on the individual end-user.
The challenges the meter companies are facing is also the lack of own assets or customers or asset ownership, but they own the data. By energy monitoring and efficiency advice their role is key in climate issues.
Water companies
Water companies facing an increasing need to understand the impact of Climate Change on the availability of water and to be able to forecast the availability of water, e.g. changes in rainfall and collection and storage of water. Also they have to manage the impact on the environment and managing the relationships with all the environmental bodies.
The aging infrastructures challenges water companies to maintain a reliable water supply and to guarantee water quality.
Huge investments are required to replace ageing water infrastructure. With water related services twice as capital-intensive as electricity and three times as capital intensive as gas, many companies simply cannot afford to upgrade their infrastructure, many of which are decades to a century old.
Efficient water management is no longer simply about supplying water to the tap. It encompasses waste water treatment, water reuse and desalination systems all of which require a high level of expertise to design, implement and maintain. The water consumption is still increasing despite continuous water saving efforts both industrial as well as domestic.
Increasing demand for water and the pressure it puts on infrastructure is also an issue and takes a variety of forms. In many large, older cities growing populations drive demand. In parts of Europe communities are sprouting in places where
basics such as piping and water supply sources do not yet exist. Smaller communities with an ageing system have a critical need for a stable and sophisticated water management system to meet incremental growth.
