New Players Enter into the Energy Industry

In a MarketWatch article, Guidehouse discusses why utilities that ignore innovation might soon be out of business

Utility companies have remained relatively unchanged for the past two decades, kept in business largely by necessity. Now, new innovations are creating opportunities for tech giants and other businesses to come in and grab hold of the marketplace. 

In a MarketWatch article, Guidehouse’s Ted Walker, managing director, discussed utilities’ potential competitors and why utility companies need to adapt their strategies.

Companies like Google and Amazon are predicted by some to soon enter into energy retail, especially after garnering attention for their smart home offerings. 

Walker noted that how power is delivered to the home has always allowed for natural monopolies to develop due to the expensive infrastructure needed, along with the restrictive regulations that govern its delivery. These barriers to entry have many utility executives believing they are untouchable.

“But even without the emergence of true competition from Amazon or Google, those same executives should have the good sense to at least be concerned,” said Walker. “In a decarbonized world, giant oil and gas companies like Royal Dutch Shell, France’s Total, and Italy’s Eni know they’re in trouble and have already shown their willingness to compete by announcing that they’ll be devoting up to 10% of their annual budget towards their growing power divisions.”

Walker noted how some utility companies are beginning to look ahead and take small steps to meet new consumer needs. However, he said these small changes might not be enough. If utilities don’t see the shift in the energy space as an opportunity, he believes that someone else will. 

Read the MarketWatch article

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