A month ago, Roberta Bigliani and I travelled to Amsterdam for our annual whirlwind European Utility Week tour. This year #EUW17 attracted over 12,000 international visitors, over 500 utilities, 56 utility delegations, 550 conference speakers and 600 exhibitors to share and discuss how the utility industry is transforming and embracing innovation all around. After three full days of meetings with utilities, digital disrupters and technology partners on and off the rich exhibition floor, here are a few key takeaways from the IDC Energy Insights' EMEA analyst team on #EUW17:
- DX, interrupted. While digital transformation has been on top of board agenda for a while, European utilities (and this is true for many other industries) seem to be stuck in execution. With their traditional split into generation, grid, residential, C&I, and trading entities utilities tend to be large, complex organizations, even after two decades of liberalization and unbundling. Unfortunately, technology is moving faster than complex organizations can learn, which makes utilities' inability to digitally transform more a culture issue than a technology one. European utilities are equipping themselves with the platforms necessary for DX, and are working hard towards building a pool of DX capabilities among their people. Yet, they are struggling to find the right organizational vehicle for digital innovation, not to mention identify a clear DX roadmap and ways to measure performance on the corporate scale. There seem to be vast opportunities for the utility technology and business service ecosystem to envelop DX into a more holistic offer.
- EV "point of no return". "Electric cars are a good idea for an electric company" — the CEO of Enel was recently quoted saying — and one that has been on utilities' radar for a while. This year's bold commitments to electrify transportation in Europe confirms tipping for road mobility is within sight. European utilities are eyeing the opportunity well beyond the core business (infrastructure, demand flexibility, retail) as a way to access new revenue streams. Examples include charging solutions and infrastructure management services for towns and businesses, smart payment systems and community services to individual owners. Furthermore, with EVs doubling up as distributed storage systems, there is a clear opportunity to link mobility and home energy management systems into expanded smart energy services.
- Threat of price parity for self-generation. At the current trajectory, the price parity of rooftop solar plus stationary storage systems and grid-delivered electricity is also within sight in Europe. Advances in PV technology and form factors (e.g., solar roof tiles and solar bricks) and the price parity of combustion and electric cars (expected for the early 2020s) will further add to the mass-market attractiveness of these systems. Of course, this won’t open the floodgates of grid defection, but it will mark a crucial turning point for the financial attractiveness of the industry. The impression is that many utilities and industry observers are unaware of how close in time this point really is.
- The democratization-reliability conundrum. Generation is decentralizing, customers are becoming prosumers, virtual power plants include ever smaller generators and loads, non-utility non-grid assets are becoming part of the system, P2P electricity trading is not so far-fetched anymore. In short, the democratization of electricity is growing! With it, however, keeping the system (and quality of service) stable is also growingly complex. There is a growing sense of realization that digitizing the grid and widening participation to a more efficient market are the only route to stable energy democratization. After all, there is little value in a smart grid without an intelligent market.
As demonstrated by the conversations at, utilities are busy reinventing themselves to ensure they have a clear identity and purpose in the, not so distant, future. The rebirth of utilities is gaining momentum and we are seeing an increasing number of utilities become 3D - decentralized, divergent and digital. IDC Energy Insights expected that "by 2020, 50% of the top 100 worldwide utilities will have started their rebirth in 3D leading to a 15% improvement in their EBITDA."
We look forward to seeing how the utility industry has evolved next year in Vienna for. See you there!