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Nov 2016 - IDC FutureScape - Doc # EMEA40123816

IDC FutureScape: Worldwide Utilities 2017 Predictions

Authors: Roberta Bigliani, Emilie Ditton, Gaia Gallotti, Yayoi Hirose, Kevin Prouty, Sparshy Rajeev Saxena, Jean-Fran├žois Segalotto, John Villali, Nigel Wallis
Abstract

The traditional utility business model is broken, the pace of decarbonization is accelerating, and distributed generation is on the rise. At the same time, technology and the overall business environment are changing at a tremendous speed, which will only hasten. This IDC study contains the outlook of IDC Energy Insights' analyst team for the worldwide utility industry for 2017, as well as the planning horizon for the next 24 months and beyond. The outlook is presented through the lens of the 10 predictions that make up, in IDC Energy Insights' view, the framework for IT and line-of-business (LOB) decision makers and influencers' technology-related initiatives in the year ahead (see Figure 1).

IDC Energy Insights' top 10 predictions for worldwide utilities for 2017 are:

  • Competition. By 2020, non-utility companies and digital disrupters will seize 20% of the energy retail market, tripling the profitability gap between thrivers and survivors.
  • Business models. By 2020, 50% of competitive-market energy providers will drive their revenues by transforming into "convenient lifestyle" providers.
  • Power markets. By 2020, 2.5GW of electricity will be generated by 20% of Fortune G500 companies who will wholesale their distributed energy resource (DER) excess power through utility-independent subsidiaries.
  • Workforce digital augmentation. By 2019, 70% of the mobile utility workforce will not be equipped with augmented reality and wearables, missing out on optimizing operations, improving safety, and easing skills gap.
  • Asset digitization. By 2020, 25% of utilities will integrate asset performance management investments with sensor data and cognitive capabilities, boosting asset efficiency and reducing maintenance costs.
  • Distributed energy resource management systems (DERMS). By 2019, utilities will need to learn how to integrate externally originated asset, market and grids data and 30% will invest in distributed energy resource management systems.
  • Customer experience (CX). Failing to deliver superior customer experiences, only 1 in 5 utilities will raise customer satisfaction scores by 10% or reach positive net promoter score (NPS) by 2018.
  • Cybersecurity. By 2018, 60% of a utilities' strategic and operational security technology will be managed at the board level and orchestrated by government agencies.
  • Internet of Things (IoT). By 2018, misaligned regulatory frameworks and poorly considered commercial models will cause 50% of smart metering IoT initiatives to fail to deliver value beyond the pilot stage.
  • Cloud. By 2019, to support their digital transformation agenda, 25% of top 100 utilities will cut IT costs by at least 30% by migrating IT infrastructure into public cloud.

"Utilities' traditional business models are under attack, directly and indirectly," said Roberta Bigliani, associate vice president, IDC Energy Insights. "Utilities are racing to reinvent their roles and have started a profound transformation journey. The industry will be reborn in 3D: decentralized, divergent, and digital."

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