January 9, 2008—IBM Global Business Services recently unveiled its new report, “Plugging in the Consumer: Innovating utility business models for the future,” which forecasts how the change in energy customers’ expectations will impact the utility industry’s business model in the next five to ten years.
Based on insights from a consumer survey, interviews with utility executives, and IBM’s own industry experience, the report predicts a steady progression toward a participatory network where consumers actively “plug in” to the energy business to a degree not seen before: they will proactively manage their energy usage, and even sell back surplus power they generate. This further supports the industry’s movement towards an intelligent utility network, or “Smart Grid.”
IBM surveyed 1,900 consumers from six countries: Australia, Germany, Japan, the Netherlands, the United Kingdom, and the United States. IBM also interviewed nearly 100 industry executives in 26 different countries across Europe, North America, and Asia Pacific.
According to the report, three converging trends are changing the energy industry:
- Consumer involvement—one half or more of the consumers were interested in self-generation if they could save 50% on energy costs, have 100% reliability at no additional cost, or sell power back to the utility;
- Climate change concerns—among those who currently do not have the option of choosing renewable power sources, more than 60 percent expressed an interest in doing so; and
- Technology advances—from a technology perspective, smart meters, network automation and analytics, and distributed generation will drive the most industry change in the near term, contends the report.
Other key findings from the IBM report:
- Within five years, sufficient energy supplier choice will allow consumers in most major competitive markets to easily switch energy providers-—an option that is not widely available now in most of the world; and
- Within ten years, utility demand management initiatives will expand dramatically.
For the complete report, visit IBM’s Plugging in the Consumer Web site.
