and Utilities
Industry Trends
Managing a
revenue downturn
while meeting
the demands of
consumers
Contacts
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About the authors
Steve Jennings is a partner with PwC UK and plays a key role in the
power and utilities sector practice. Based in London, he has more than
20 years of experience in the sector, including advising on strategic
issues as well as on the design and implementation of business
transformation programs.
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Introduction
If your company is in the power and utilities sector, the challenge you
face is to close the demand gap and provide value for customers
profitably. Do so, and you can expect a future of growth and customer
loyalty. Fail, and you may risk being eclipsed by upstart competitors.
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Meeting the demand gap
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Alexa and Google Home could change consumer attitudes more quickly
than expected. The same survey, for example, found that 81 percent of
people with smart heating devices noticed a positive effect in the daily
running of their home.
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Blueprint for a service-based
model
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Redefining the portfolio
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This would include more adjustable pricing approaches such as fees-for-
service, shared performance gains, and value-based margins. Following
an inorganic approach also means shifting from a business model of
owning assets and driving return on capital to a model that focuses
on product and service volumes that create margins.
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Conclusion
The push into emerging energy services will affect more than individual
companies. It will reshape the power and utility landscape, favoring
utilities that grow beyond their traditional business model to build a
market-based technology and related services portfolio. As power
utilities make this move, the industry will change around them, in
ways that are still hard to predict, in part because the technology is
still evolving. Now that customers are interested and see these changes
as beneficial, they are ready for a new relationship with energy
providers. The primary limit for utilities is their own ability, whether
in marshaling their capital, establishing productive partnerships,
choosing effective technologies, or bringing to scale the capabilities
they will need to thrive over time in this new world.
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