The utilities industry is a large influencer of the global economy. In the US alone, the utilities sector has a market capitalization of over US$1.5 trillion, making it one of the largest and most important segments of the economy.
Several sectors of the utilities industry will see rapid growth over the next 5 years due to emerging trends that are shaping the global economy. One example is the re-engineering of the electric power sector through smart grid technology. A smart grid is an electric grid made up of components such as renewable energy resources, smart appliances, and energy-efficient resources. The technology is gaining popularity due to the ease of electric power conditioning and control of the generation and distribution of electric power. It is expected that energy storage installation among end-users will witness growth due to smart grid development. Initiatives by various governments will support smart grid development as they consider it an option for reducing carbon emissions and improving energy security.
Despite the massive potential for future growth, there are plenty of challenges ahead for the utilities sector. Due to fluctuations in the price of raw materials, the availability of resources such as coal, natural gas, petroleum, and others is a strain on the electric power generation, transmission, and distribution sector. The fluctuations in price depend upon the demand-supply balance in the broader market. Therefore, it becomes difficult for electricity companies to create accurate long-term plans around raw material costs and availability.
Before we dive into the future trends and challenges of the utilities sector, it is important to define the industry. BizVibe’s platform contains more than 180,000 utility companies which are segmented into 3 categories. Each category is being transformed by its own set of trends and challenges that will greatly influence the direction of the utilities industry in the coming years. Below we will discuss the trends and challenges influencing the major categories of the utilities sector.
Emerging Trend – Transition Towards Renewable Energy
The renewable energy transition is an evolving trend across countries. The increasing shift is attributed to the rising concerns about the depletion of fossil fuels. This is leading power companies to use renewable energy sources such as wind power, tidal power, biomass, biofuel, solar energy, and others for power generation in place of fossil fuels. The transition to renewable energy is expected to increase rapidly in the next several years as it has positive impacts on the environment, government, and society.
Major Challenge – Rising Environmental Concerns
The fossil fuels that are fired at electric power plants result in the emission of carbon dioxide. Regulatory authorities continuously monitor plants to examine whether they are following the necessary conditions. This is putting significant compliance and sustainability pressure on power companies as they need to take measures to ensure adherence to the regulations and reduce environmental damage.
Emerging Trend – Adoption of Advanced Technologies
There is increasing adoption of technology for natural gas distribution. The Intelligent Utility Distribution Network (IUDN) is a technology that is shaping the future of the natural gas industry. IUDNs link customer appliances, utility meters, transformers, and utility distribution operations, making it easier to monitor various components in the distribution system. The adoption of drones that use advanced visual control systems ensures easy monitoring of natural gas pipelines and helps maintain the security and efficiency of pipelines. Companies are also exploring blockchain technology to improve efficiencies within the natural gas distribution ecosystem.
Major Challenge – Stringent Regulations by Authorities
Natural gas distribution is a highly regulated industry. Operators need to ensure complete adherence to regulations and safety measures. Moreover, regulations differ between states and countries. International distribution deals are also fraught with regulatory risks as the terms of trade can change based on the policies of the incumbent government. As the natural gas distribution depends heavily on investments and infrastructure, regulatory changes create investment risks and significant operational overhead.
Emerging Trend – Adoption of Digital Farming
The integration of IT into agriculture has encouraged the digitalization of farming applications. Smart irrigation systems are using sensors that provide information about soil conditions and crop data and enable optimal water utilization. Smart irrigation systems are automating water use efficiency, precision irrigation using drip and variable rate methods, and fertigation.
Major Challenge – High Energy Consumption
Energy costs are the largest cost drivers for a wastewater treatment plant as they contribute 30%-40% of the overall operating cost. As a result, fluctuating energy prices put severe cost pressures on operations and challenge the utility to maintain cost-efficient operations.
BizVibe’s platform contains more than 180,000 utilities industry company profiles which are free to view. Each profile consists of in-depth company insights, comprising 50+ data points, including full industry trend and challenge analysis for 3 utilities categories.
BizVibe company insights help provide answers to questions such as:
✓ How will industry challenges impact specific geographic regions?
✓ In which regions will emerging trends be the most prominent?
✓ What are a company’s major product and service offerings?
✓ Who are a company’s key executives and what are their roles?
✓ How is a company positioned financially?
✓ Who are a company’s major competitors?
✓ What is the risk level of doing business with a given company?
✓ What is the latest company news?
Additionally, BizVibe enables users to connect with utilities industry companies and includes a feature that allows companies to send and respond to RFI/RFPs directly on the platform. There are industry profiles of utility companies from over 200 countries on BizVibe, with free access for users to discover, analyze, and connect with these utilities industry companies.