New Zealand’s energy sector being transformed

New Zealand’s energy sector being transformed

Power is being transformed from a top-down centralised system to one that is much more interactive yet also decentralised and fragmented, according to PwC’s latest report, The road ahead: Gaining momentum from energy transformation.

Global megatrends are driving these changes in the sector with technological innovations having the biggest impact. The value pool is shifting downstream towards ‘behind-the-meter’ segments in Europe, with a similar trend expected to emerge in New Zealand.

PwC Energy Sector Leader Lynne Taylor says, “Customers now have increasing choices regarding their energy supply mix and the range of options open to them will only increase from here.”

This will have implications for companies across the energy sector, and PwC expects that growth will become more dependent on innovation, with success coming to those companies that use innovative technologies, services and business models to gain competitive advantage.

PwC Digital Strategy and Data Leader Greg Doone says advances in the cost and practicality of battery storage technology could drive a quantum leap of change and would make increased customer self-sufficiency feasible when used together with personal energy generation.

Distributed generation is already taking a large chunk out of the market for centralised generation in countries like Australia and Germany, undermining the classic power utility business model and adding complexity into balancing supply and demand.

“While it is unclear when these trends will have a noticeable impact in New Zealand, it is important that companies take a clear view on the ways in which the New Zealand market is likely to evolve and what it means for their own organisation’s strategy and business model,” says Ms Taylor.

Mr Doone adds that the sector understands the challenge ahead of them and in data and agile digital practices, New Zealand’s energy companies need additional capability inside their businesses. Both of these areas are critical skills to deliver transformation and product development innovation that will make a meaningful difference to their customers.

“Analytics capabilities will need to be a core strength if companies are to fend off competition from new entrants, who may already have these capabilities at the heart of their business. This is where the scale of New Zealand providers gives them an advantage and they can embrace change quicker than larger international players,” he says.

The combination of the internet, mobile devices, data analytics and cloud computing with smart grids and smart metering, are creating these opportunities for utility companies to get closer to customers, play an enhanced energy partner role and leverage data opportunities.

Ms Taylor concludes, “This growth convergence of storage technologies, digital technologies and smart meters will provide a demonstrable difference to the customer, and the energy providers that can deliver this kind of differential, simply, will win.”

ENDS

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