- Trends & Technology
The energy supply of the future
Shaping the future of the energy industry – that’s our aspiration at innogy Consulting. But what will this even look like? What role will energy suppliers play in the future? And how will their business model change? Will it be a pure service business or will the future of energy suppliers lie more in the operation of an energy backup?
I discussed exactly these questions with my colleagues Daniel Sochaczewski and Marie-Sophie Wegner at our Friday lunch. Together we developed a scenario of how we see the energy suppliers of the future.
What archetypes can exist in a future energy system and what roles can energy suppliers play in this? This was the main question we addressed at lunch in our Essen canteen. In order to find the answer, it was first necessary to define how the energy system will be designed in the future.
The middle of the value chain will disappear
If the system develops in the direction of a decentralised supply – which we assume – this means that there will only be two types of players in the future. On the one hand, local parties, in the form of so-called “prosumers” who will generate and consume energy simultaneously, and on the other hand, global players who will trade and balance the energy generated by the local prosumers. In this scenario, a gap would then arise in the middle of the value chain between these two groups – i.e. at a regional and national level. And it is exactly here that a variety of power providers will get stuck because electricity supply alone would no longer be an economic source of income in this scenario.
Key question: nuclear power or energy revolution?
That raises the question: what might the business model of the future look like for energy supply companies? The answer will probably vary from country to country. In individual countries such as Great Britain, Poland and Finland, for example, nuclear power plants are currently being built again with the aim of ensuring the necessary energy backup reserve at a low cost. This secures a business area for the energy suppliers located there. However, this solution is expected to be pursued by only some of the countries. We assume that the energy transition will prevail in Germany and Europe – and that more and more nuclear power plants will be decommissioned.
Specialisation instead of generalisation
But what opportunities do energy suppliers have in countries that do not rely on nuclear power? After all, they will then no longer be able to cover the entire value chain – as we know it so far. We believe that the compelling consequence will be that more and more players will focus only on individual parts of this chain. Specialisation instead of generalisation will be the name of the game. We already see many start-ups in the energy sector following exactly this strategy – especially as challengers in the retail sector. We also expect major changes in the area of networks: the focus will no longer be on the asset “network”, but rather on providing a platform solution for managing its utilisation.
The state must guarantee network security
However, a decentralised supply system also has a further consequence: with a large number of local stand-alone solutions, the issue of grid security must become increasingly important – especially when customers only use the power grid a few times a year and otherwise supply themselves self-sufficiently. In our opinion, a central office – a government agency, for example – is needed to guarantee this very network security. The state could then secure the electricity supply within the framework of the universal service. But what role will energy supply companies play then?
Do energy suppliers have a future at all?
Will pure energy suppliers still exist at all in the future? We’re leaning towards saying no. Because the industries are already beginning to mix. Issues such as Smart City or autonomous driving are also increasingly becoming fields which energy suppliers are moving into. Perhaps this is the answer to where the future of energy suppliers