Many utilities industry executives, surveyed by Accenture as part of its newly released Digitally Enabled Grid research, reported that the traditional electricity distribution model is no longer fit-for-purpose. Where do utilities go from here? Explore the findings.

1. Are distribution businesses
at risk of losing their
power?

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Targets and constraints from regulators
Competition from new players in the value
chain
Rising costs from increased complexity
Distribution:
A business under threat
Change in customer behaviors and
expectations
Disruption in demand from new energy
technologies
Pressure to drive greater network
reliability from aging infrastructure

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Consumer behaviors and expectations are changing
% of consumers who would consider investing in becoming
power self-sufficient and not having to buy energy from their
energy provider
of consumers see reliable energy
delivery as an important factor to build
trust with their energy provider
91%
of consumers are interested in energy
management programs
69%
57%
Source: Accenture’s New Energy Consumer research program.

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Grid-related technical risks are a struggle
% of utility executives that expect an increase in grid faults (2016):
56% 54%
38% 37% 36%
32%
Distributed renewable
generation (low-voltage
connection)
Large-/utility-scale
renewables (medium-
voltage connection)
Plug-in electric vehicles
(PEVs)
Distributed combined
heat and power (CHP)
Microgrid operation Distribution-level
storage
2014: 61%
2013: 41%
2014: 53%
2013: 33%
2014: 42%
2013: 37%
2014: 26%
2013: 19%
2014: 40%
2013: 41% 2014: 28%
2013: 14%
Source: Accenture’s Digitally Enabled Grid research program.

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Competition from all sides is expanding
Products and
services
Utilities, digital energy
retailers, non-energy
providers, community
projects
Access to
capital
Value to
shareholders
License to
operate

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The biggest challenges distribution business are currently
facing
d
North America
• Controlling operating costs
• Increasing end-consumer
expectations
• Aging assets
• Aging workforce
Europe
• Reducing allowed regulatory returns
• Integration of distributed generation
• Maintaining the quality and reliability of
the power supply
• Aging workforce
dChina
• Increasing end-consumer expectations
• New competitors entering the value chain
• Decreasing demand
• Maintaining the quality and reliability of the power supply
• Aging assets
• Access to skills
Utilities executives believe these to be the biggest challenges currently faced by the distribution business
(Top three challenges including ties)
Source: Accenture’s Digitally Enabled Grid research program.

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The traditional electricity distribution model is no longer fit-
for-purpose
45%
of utility executives report facing significant
to major issues with a traditional
transportation model for distribution to
provide a sound foundation to meet their
distribution’s technical and financial
challenges
Source: Accenture’s Digitally Enabled Grid research program.

8. What new role will
distribution companies play?
Copyright © 2016 Accenture All rights reserved. 8

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Accenture believes that the most sustainable model will be the
distribution platform optimizer
Looking ahead in the next 10 years
Platform access
provider
Provides neutral
access to network to
independent players
expect their company’s
role to evolve towards
one that integrates
distributed energy
resources (DER) and
facilitates the market
for DER services—a
distribution platform
optimizer
66%
Europe
73%
Decoupled
integrated
utility
Removes volume
bias and
disincentive to
optimize
Smart grid
operator
New technology in
existing
management
paradigm
Distribution
platform optimizer
Provides optimal
outcome for overall
system
Utility executives
looking ahead in the
next 10 years

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What’s next?
Accelerate transition to
being a digital utility
Take action on talent and
culture gaps
Define roadmap of initiatives
in “no-regrets” capabilities
Invest in strategic assets –
battery storage, electric vehicles
and alternative fuels, grid
automation/sensing/control
Investigate corporate venturing,
partnership and joint venture
Define your plays in demand
response and beyond the meter
Pilot new solutions microgrids,
distribution communities, virtual
power plants

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