Navigating the Energy Future

November 21, 2017

APPrO

I was delighted to be asked to introduce Jan Vrins who was the opening speaker at the annual conference of the Association of Power Producers of Ontario.

Jan Vrins is the leader of Navigant’s global energy practice. His team is at the forefront of a global energy transformation that is a changing the energy sector into a cleaner, smarter, distributed and mobile energy ecosystem. It is also a transformation that will also change the way we experience cities.

As examples, his team has helped the City of Madison develop its 100 percent renewable energy strategy and the City of Utrecht develop its climate neutral energy plan.

His first advice to the room of primarily energy producers was not to underestimate the pace of change. The energy transformation is fundamentally changing the way we produce and consume energy. Existing energy infrastructure is already being replaced by the Energy Cloud, a cleaner, more distributed, and more intelligent energy system.

While new technologies have enabled the energy transformation, customers are the drivers of change. They are turning to local energy solutions, because they offer greater affordability, sustainability and flexibility. And as costs for these new technologies continue to plummet, demand is accelerating. Local energy solutions are already proving less expensive, than centrally-generated power.

While the change is fast and far-reaching, he encouraged the audience to embrace the opportunities. While renewable and distributed energy will not replace the need for central systems anytime soon, without integration, they will be far more disruptive to the system. He also noted that while the introduction of renewable energy has been disruptive, distributed generation will be even more so.

Old business strategies won’t work. However, there are two emerging business models that offer utilities the chance to re-invent their future. The first is “energy as a service”. Under this business scenario, utilities grow a portfolio of integrated energy services to meet diverse customer needs. The second business model positions the utility as the orchestrator of an energy cloud platform.

Consumers are asking more of their utilities, but they have been slow to respond, as have their regulators. Utilities will need to prepare for their ratepayers starting to act like customers. If they don’t, their business will suffer.