The Revolution will be Electrified
DNV GL’s Energy Executive Brunch Forum, hosted at The Houston Club last week, brought together key players in the competitive energy industry and included a dynamic panel and a keynote address with some of its leading voices. The conversation revolved around the importance of renewable energy technologies and evolving customer preferences that resulted in the following primary takeaways:
- Customization is Crucial – Customers are setting aggressive goals around sustainability, and one size does not fit all. To be successful, solutions must be tailored to the specific customer need.
- We Have the Tools – The technologies that will provide the foundation for the energy transition already exist and costs continue to decrease; we need to rally around the regulatory frameworks that allow flexible business approaches that benefit customers.
- We Have the People – The energy industry has substantial human capital resources that are actively mobilizing to execute on the energy transition – we shouldn’t wait for external disruption from the likes of Google or Amazon
The panel discussion was moderated by DNV GL’s Ellen Crivella and brought together Matt Butts of EDF, Raj Bazaj from Constellation, Kevin Boudreaux, of MP2 Energy, and Chuck Sutton from MC Squared Energy to discuss the challenges facing the competitive energy industry, especially in light of the energy transition. The customer is at the center of the change taking place and they are driven by the environmental, social, and governance (ESG) and sustainability movements. The most successful providers are collecting feedback from end users and developing products that will meet their specific needs. Matt Butts (EDF) described this dynamic by drawing a contrast with the process used by Apple, which has become very good at “telling the consumer what they want.” Conversely, the energy industry does not need to force anything into the market because there is a simultaneous top-down (investor driven) and bottom-up (consumer driven) demand for renewable energy options. Competitive energy suppliers have been on the leading edge in this category of product design and will continue to innovate.
Building on this thread, Raj Bazaj (Constellation) described the current opportunity for competitive energy suppliers to engage customers not as “electricity consumers” but as partners on a sustainable mission. As more scrutiny is placed on emissions and supply chain management, many companies have established aspirational goals to improve ESG metrics in a short time frame with limited details on the execution process. Competitive suppliers are in a position to deliver more value and expertise in this area than any other sector by helping the customer understand the most important areas to target for improvement and establishing key milestones.
Developing strong risk management strategies is a crucial piece in the process of new technology adoption, and Kevin Boudreaux (MP2 Energy) highlighted the improvements that have been made in recent years. Renewable energy resources have become more common on the electric grid and there is a significant amount of data measuring project performance which has allowed customers to become more comfortable with these assets. The reliable returns generated by wind and solar assets has also attracted substantial investment from established financial institutions in recent years. This stability in the market has allowed competitive suppliers to offer more flexible terms on renewable contracts and enticed customers to enter into longer contracts.
Chuck Sutton (MC2 Energy) has his finger on the pulse of the residential market and has seen the groundswell of interest for renewable energy when the company launched its first community solar program. The company’s 1 MW project is part of the first wave of community solar developments in Illinois and the entire program reached full subscription with a minimal amount of marketing. This shows the interest and appetite at the residential level for individual consumers to have an opportunity to participate in the energy transition. While residential energy storage is still a few years away, the demand for these products is increasing rapidly. Over the course of the panel discussion, Raj, Kevin, Chuck and Matt went into detail about the forces that are causing the market to evolve.
The event finished with a fireside chat between Elizabeth Killinger, Executive Vice President of NRG Retail, and Michele Tihami of DNV GL. The two executives discussed the actions that are necessary for competitive providers to disrupt the industry from within and continue to provide leadership in the energy transition. For the next wave of product innovation to take place, state and federal regulators will need to align incentives that promote the integration of distributed energy resources and increase competition. Achieving this objective will require collaboration across the industry and a renewed focus on the benefits that customers can receive from competitive products that include electric vehicles, energy storage, and deeper green options. Elizabeth and Michele concluded by emphasizing the point that we have the resources to execute on these ambitious targets. The energy industry is loaded with entrepreneurial individuals who are eager to take on new challenges as a group and have a proven track record of success.
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