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Question

Do you think that there will increasingly be non-utility disintermediaries (maybe Amazon? Apple?) that target beyond the meter revenue opportunities, particularly in light of FERC's recent Order 2222?

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Special Note: This question was posed during a recent Energy Central PowerSession: Maximizing Beyond-the-Meter Revenue Opportunities

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Disintermediation is already happening and will grow rapidly, especially non-utility providers of real and virtual distributed energy resources and participation in retail transactive energy markets. There is already considerable innate disintermediation: think of consumers charging their electric vehicle while away from their home. or a third party installing, perhaps even operating and maintaining solar PV or a microgrid or energy storage, or energy management at their home or business, There is another kind of relationship disintermediation that happens when utility customers learn about their energy supply situation and options from someone other than their incumbent electric utility.

 

mark wilkinson's picture
mark wilkinson on May 11, 2021

Steven makes great points regarding how many different parties potentially may complement, supplement, or interrupt the relationship between a utility and their customers as solar, fleet electrification, battery storage, efficiency and energy management vendors compete for attention of the consumer.  Utilities have primary advantage due to their infrastructure, but investments flow to upstarts looking always to disrupt legacy customer relationships.  Good call.

Steven Collier's picture
Steven Collier on May 12, 2021

Thanks for reading and commenting! 

I think that the future holds increasing opportunities for customers and disintermediaries to bypass or gain access to utilities' long held energy supply and transportation infrastructure. This will be especially true when the cost of distributed generation, particularly solar, and battery energy storage become competitive with the cost of energy and infrastructure from the incumbent electric utility.

 

As I mentioned briefly during the session, data suggests that customers would be willing to consider alternative providers for their energy and utility service relationships, and Amazon or telecom providers may rank high on the potential vendor list.  However, I expect that companies considering entry to the utility market will quickly find the space far more challenging than analysts may expect. 

Based on the current landscape, I'd certainly expect to see solar and battery storage solutions to expand, but we're not sure yet what other technology may come into play.  Telecom providers, for example, have shown a remarkable appetite for allied industries like entertainment distribution, content creation, and home automation in the past decade.  While they may examine energy and utility opportunities, we aren't certain that these industries want to expand too far too fast to expect a utility disruption anytime soon. 

Having said that, consumer technology brands will likely be very interested in home energy management and home automation, product segments that create value and an impressive cache of customer behavioral data.  Insight into residential and commercial consumption could fuel a number of new products and services in the space, though the adoption of smart home gear hasn't yet achieved the type of mass audience that analysts have predicted by now.  

Speaking personally, I'd expect more of the consumer brands to engage on energy storage, energy management and home automation due to their relative affinity, while industrial brands with knowledge of the real costs of generation and distribution tackle some of the bigger grid of the future challenges.  But, that's just a personal observation.

Steven Collier's picture
Steven Collier on Dec 29, 2020

Thanks for an insightful answer to my question. 

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