Distributed Energy Resources Pose Biggest Disruption to Utility Business Model

Navigant and Public Utilities Fortnightly identify key challenges,
provide guidance for utility leadership in new industry report

CHICAGO–(BUSINESS WIRE)–Today, Navigant (NYSE:NCI) and Public Utilities Fortnightly
released the second edition of “State & Future of the Power Industry,” a
special report exploring the current status as well as the future of the
electric utility industry.

Key findings from this year’s report highlight that although low natural
gas prices and renewables are impacting the utility industry, the
biggest disruption is coming from increased penetration of distributed
energy resources (DER), as well as the broader digitization of the
utility value chain.

“As the industry transformation accelerates toward a cleaner, digital,
distributed, and mobile grid infrastructure, the disruption facing the
industry will proliferate and become increasingly complex,” said Jan
Vrins, managing director and global Energy practice leader at Navigant.
“This report shows that utilities must provide new energy products and
services to their customers that are supported by new business models
that will allow them to continue to deliver customer and shareholder
value.”

By 2030, Navigant expects the global market for DER, digital energy
products, and services will create at least $1.3 billion in new revenue
opportunities globally, according to the report. New DER capacity from
distributed generation, energy storage, energy efficiency, demand
response, microgrids, and electric vehicles is expected grow three to
five times faster than new central station generation in the next 10
years.

“Specifically, energy efficiency and distributed generation are putting
pressure on overall load growth and disrupting the traditional utility
business model,” Vrins said. “This is occurring as the industry faces
fast-paced changes in policy, regulation, technology, and customer
demands.”

Additional findings in the report are based on interviews with key
executive leaders in the segment, including Navigant experts, as well as
a Public Utilities Fortnightly survey of more than 400 utility
industry leaders. The survey results revealed current thinking on the
biggest issues facing utilities today:

• Nearly half of the respondents see increased penetration of DER as the
  most disruptive threat to traditional utility business models over the
  coming decade, and more than 60 percent believe it will force a major
  shift in business models in the next decade.
• Roughly 40 percent believe technology cost reductions will be the
  greatest driver of clean, renewable energy adoption over the next
  decade.
• One-third ranked electrification of transportation as offering the
  most revenue growth potential for utilities.
• Over 40 percent of respondents agree that wind and solar, combined
  with storage, are the most viable resource alternatives to backfill
  declining baseload generation.
• Four in 10 respondents point to a supportive regulatory model as the
  most important tipping point for utilities to aggressively pursue
  owning and operating DER.
• And, over two-thirds of the respondents see energy platform provider
  or network orchestrator as the role for the future utility to pursue.

To see the full report, click
here, and join the social media conversation through #FutureUtility.

About Public Utilities Fortnightly

Public Utilities Fortnightly (PUF) has been, since 1929, the magazine of
record for the electric and natural gas utilities industry. It is a
forum for commentary, opinion and debate on utility regulation and
policy. PUF is must-read for the broad readership of some fifteen
thousand-plus senior utility managers, regulators, policymakers, and
leaderships of the asset owner/developer, advocacy, financial, legal,
engineering, economic and consulting communities that must address the
industry’s challenges every day.

About Navigant

Navigant Consulting, Inc. (NYSE: NCI) is a specialized, global
professional services firm that helps clients take control of their
future. Navigant’s professionals apply deep industry knowledge,
substantive technical expertise, and an enterprising approach to help
clients build, manage, and/or protect their business interests. With a
focus on markets and clients facing transformational change and
significant regulatory or legal pressures, the firm primarily serves
clients in the healthcare, energy, and financial services industries.
Across a range of advisory, consulting, outsourcing, and
technology/analytics services, Navigant’s practitioners bring sharp
insight that pinpoints opportunities and delivers powerful results. More
information about Navigant can be found at navigant.com.

Contacts

Navigant Investor Relations
Jennifer Moreno Reddick
312.
573.5634
[email protected]
or
Navigant
Corporate Communications
Belia Ortega
312.583.2640
[email protected]