Distributed generation threatens traditional power utility business model

The traditional business model for the power utility companies is under threat from distributed generation and technology changes, according to the latest survey from PwC.

In its new global power and utilities survey, 94 per cent of respondents predicted a “complete transformation” or “important changes” to the power business model.

However, only 33 per cent of European respondents said it would be likely or highly likely that increasing levels of distributed generation will force utilities to significantly change their business models.

Within Europe, 17 per cent said distributed generation represents a threat, with 83 per cent it presented an opportunity for the big utility companies.

Norbert Schwieters, global power and utilities leader at PwC, said: “Decentralised generation is already eating into revenues and partly marginalising conventional generation.

“Ultimately it could shrink the role of unwary power utility companies to operators of back-up infrastructure.”

Steven Jennings, UK power and utilities leader, PwC, added: “Power utility companies will need to respond to these changes to not be eclipsed by technological and market change, while strategies that identify the best revenue opportunities in changed and, potentially transformed future market landscape, will be key to survival.”