The impending disruption in the power industry is all but inevitable, according to the most recent iteration of the PwC Global Power & Utilities Survey.
The survey, which is based on interviews with dozens of utility executives from dozens of different countries, claims to be tracking “boardroom thinking in utility companies” as the industry grapples “with the prospect of a very different energy world ahead.”
What will the energy world ahead look like?
According to PwC’s findings, five megatrends are shaping the future of the power and utility industry, namely: technological breakthroughs; climate change and resource scarcity; demographic and social change; a shift in global economic power; and, rapid urbanization.
These mega-trends suggest that power generation will become increasingly distributed in the future.
“The convergent effects of technological advances, policy measures, the growth of distributed generation, new forms of competition and changes in customer behavior are having a transformative impact on power markets,” according to the PwC Survey.
A few years ago, distributed generation rarely received more than a footnote worth of attention – if that - in big-ticket industry assessments like the PwC Global Power & Utilities Survey. Distributed energy has always played second fiddle to either renewable energy or the smart grid. That is no longer the case.
The new survey suggests that distributed generation is likely to be a major catalyst of industry disruption:
In some territories, distributed generation is already taking a large chunk out of the market for centralized generation, undermining the classic power utility business model and adding complexity into the task of balancing supply and demand. Globally, survey respondents anticipate distributed generation will take a 10–20% share of total generation by 2020, rising to a 20–30% share by 2030. But a significant minority think the distributed generation share could be higher. Over a fifth (22%) anticipate a ‘30% plus’ share for distributed sources by 2030. Nearly half of survey respondents (47%) say there is a medium to high probability that distributed generation could shrink the role of some power utility companies to providers of back-up power.
If PwC’s survey is any indication, the prospects for distributed generation sat on the sidelines appear to be over.
