Utilities Must Further Adapt, Diversify Investments to Edge out Competition and Meet Changing Energy Needs

Guidehouse and Public Utilities Fortnightly release fifth annual State & Future of Power report

WASHINGTON–(BUSINESS WIRE)–A survey of nearly 400 executives and influencers across the US and Canadian utility industry found that climate change, business model evolution, and distributed energy resources (DER) integration are top of mind for industry stakeholders as both new and existing challenges accelerate unprecedented change.

Survey results from Guidehouse and Public Utilities Fortnightly’s fifth annual special report on State and Future of Power found that:

  • 71% of respondents believe climate change is already threatening current business models.
  • 66% said technology and telecommunications companies pose the largest competitive threat.
  • 62% feel rapidly increasing renewables and DER are the most disruptive force to the utility business model.
  • 46% said utilities’ own risk-averse culture is the biggest hurdle preventing investment in new business models.

“We have witnessed significant transformation unfold in the energy sector in the past decade, but we are only at the beginning, especially as new challenges arise from the COVID-19 pandemic,” says Dan Hahn, leader of Guidehouse’s Energy Providers practice. “Utilities have to further adapt and make different investment decisions as the customers, cities, and communities they serve seek to rely on a partner that can evolve as their energy needs continue to change.”

Climate Change Considerations

Utilities are playing an increasing role in decarbonizing economies, especially as destructive weather events occur more frequently. According to survey results, two-thirds of respondents said utilities should take multiple actions to proactively respond to climate change threats, including converting generation fleets to renewables and storage, embracing sustainability initiatives across operations, and integrating resiliency across the network.

Investment Priorities

Survey results also show that grid modernization initiatives remain a high priority for most utilities and a critical evolutionary step to improve grid resiliency. More than half of respondents (54%), plan to strategically focus on electrification, and about 30% plan to look to diversify products and services as commodity electricity demand continues to decrease.

Business Models

With connected DER enabling a new class of prosumers, nearly half of respondents said utilities are also recognizing the importance of embracing network orchestration roles like enabling transactive energy and facilitating third-party participants. This represents a shift from last year, when only 28% of respondents felt that utilities should serve as a transactive energy orchestrator. Although the immaturity of new business models is a slight concern, according to 19% of respondents, sentiment across the industry is still focused on more structural barriers to innovation like restrictive regulations and utility operating culture.

“This year’s survey results confirm that utilities are facing challenges in several parts of their business, but the opportunity to create long term customer and shareholder value is far greater, and it’s up to utilities to find pathways to unlock this value,” says Mackinnon Lawrence, director in Guidehouse Insights. “It’s not an easy task, but utilities seem to be better prepared for it than even a year ago.”

Download State & Future of Power to see the full survey results and insights from 13 of Guidehouse’s energy experts. The report analyzes today’s utility industry and the major changes expected in the next 10-15 years. Join the social media conversation through #FutureUtility.

About Guidehouse’s Energy, Sustainability, and Infrastructure Segment

With over 700 consultants, Guidehouse’s global Energy, Sustainability, and Infrastructure segment is the largest in the industry. We collaborate with and serve as trusted advisors to utilities and energy companies, large corporations, investors, NGOs, and the public sector to help them thrive in the rapidly changing energy, resources, and infrastructure environment. Our clients include the world’s 60 largest electric, water, and gas utilities; the 20 largest independent power generators; five of the 10 largest oil and gas majors; the 20 largest gas distribution and pipeline companies; European governments; and the U.S. federal government’s civilian agencies involved in the country’s land, resources, and infrastructure. Our highly skilled professionals form exceptional teams to help our clients transform their businesses, manage complexity and change, accelerate operational performance, manage critical programs, manage risk, meet compliance requirements, and improve operations and systems to address today’s most complex issues. We lead through our insights and excel at strategy, transformation, and implementation, creating more sustainable and resilient countries, governments, companies, cities, and infrastructure.

About Guidehouse

Guidehouse is a leading global provider of consulting services to the public and commercial markets with broad capabilities in management, technology, and risk consulting. We help clients address their toughest challenges with a focus on markets and clients facing transformational change, technology-driven innovation and significant regulatory pressure. Across a range of advisory, consulting, outsourcing, and technology/analytics services, we help clients create scalable, innovative solutions that prepare them for future growth and success. Headquartered in Washington DC, the company has more than 7,000 professionals in more than 50 locations. Guidehouse is led by seasoned professionals with proven and diverse expertise in traditional and emerging technologies, markets and agenda-setting issues driving national and global economies. For more information, please visit: www.guidehouse.com.


Lindsay Funicello-Paul




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