2Q 2018

Implementing Innovation Strategies for Utilities

Utility investments are shifting from the traditional value chain toward Energy Cloud-related companies—those focused on renewables, energy services, or software to manage distributed energy resources (DER). Guidehouse Insights’ analysis of the investments global utilities made in 2016 and 2017 also shows that European utilities are leading the charge to the Energy Cloud, likely driven by a more competitive market and renewables-friendly energy policies across the continent.

The trend toward moving away from traditional large-scale generation is reflected in the poor financial performance of the large turbine manufacturers General Electric (GE) and Siemens, both of which have shed thousands of jobs. With increasing investment activity related to new technologies, the pressure to innovate has never been greater. Innovation is a strategic imperative to succeed in the Energy Cloud future.

This Guidehouse Insights report examines utility investment activity, with a focus on preparing for a competitive future. The study compares the number of Energy Cloud and traditional investments made by utilities and examines why Energy Cloud investments now exceed those in the traditional utility value chain. It also provides detailed recommendations on how the utility industry can create an environment in which innovation can thrive.

Pages 13
Tables | Charts | Figures 4

  • What kinds of companies are attracting utility investments?
  • Why are utilities increasingly investing in Energy Cloud companies?
  • How does the Energy Cloud force utilities to innovate?
  • Why should all utilities, regardless of regulatory framework, make plans for a more competitive future?

  • Utilities
  • Regulators
  • Technology vendors
  • Analytics software vendors
  • Internet of Things (IoT) platform vendors
  • Systems integrators
  • IT consultants
  • Energy Cloud startups
  • Investor community




Energy Cloud Investments Exceed Traditional Value Chain Investments

Utility Investment Activity Is Driven by Europe

Traditional Power Businesses Struggle to Adapt to the Energy Cloud

Focus Shifts from Traditional Value Chain to Energy Cloud

Imperative to Innovate Has Never Been Greater

Innovation Is a Strategic Imperative in the Energy Cloud

Platforms Are Vital for Innovation

Innovation Processes Are Being Centralized

Innovate to Prepare for a More Competitive Future

Utilities and Technology Vendors Must Prepare to Compete

North American Utilities Should Plan for a Competitive Future

Strive to Optimize—Not Perfect—Innovation Processes

Embrace Failure

  • Value of Utility Investments by Transaction, World Markets: 2016 and 2017
  • Number of Utility Investments by Transaction, World Markets: 2016 and 2017
  • Number of Utility Investments by Investor Region, World Markets: 2016 and 2017
  • Number of North American and European Utility Investments: 2016 and 2017
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