4 Trends Impacting the Retail Energy Market
I had the opportunity to attend the DNV GL Executive Energy Forum from May 14-17th in Key Biscayne, Florida. The forum brings together C-suite executives who are focused on defining the future of energy.
Through a series of compelling panels, keynote speakers, networking opportunities and breakout sessions that focused on retail energy innovations and emerging technologies, I emerged from this event with 4 key trends that will have a meaningful impact on the retail energy market.
I anticipate that new business models, customer segments and pricing strategies may emerge out of these evolving industry conditions:
Trend 1: Flat Load is a Global Phenomenon
The US has experienced flat grid-served load throughout the past decade., and other highly-developed economies are experiencing the same trend. Recent analysis by DNV GL estimates that on a per capita basis, energy consumption is falling in many countries today. Energy efficiency gains are having a significant impact.
Trend 2: Prosumers are Pacesetting
Customer expectations are evolving. Prosumers (those that are both producers and consumers) are creating a new category in retail energy markets. This nascent but influential segment is a key driver in energy innovations. These early adopters are looking for energy solutions tailored to their needs (e.g., solar, wind, battery storage, etc.).
Trend 3: Digitization and Data Deliver
There is a wave of data coming to the energy industry. Several businesses that are making extensive use of data and analytics were featured at the Forum (e.g., Polis, Fleetcarma, Ohm Connect, ChargePoint). These emerging business models seek to leverage data in a unique way to engage customers.
Trend 4: Marginal Costs are on the Move
The marginal (or incremental) cost of providing retail energy may decrease over time. This seems to be driven by the increasing penetration of renewable energy sources (e.g., wind, solar), increased use of data and analytics, and new innovations/ technologies (e.g., blockchain) that are reducing transaction costs. As production and transaction costs decrease, fixed costs will likely represent a greater share of electricity services.
About John Domagalski
John Domagalski leads retail analytics at Constellation, driving the group’s business development initiatives. John’s team-oriented direction, supported by a deep understanding of retail markets and 22 years’ experience in business management, has made him an asset to Constellation’s retail growth and a valued resource for others across the industry. As the Director of Retail Analytics, John oversees Constellation’s analysis and evaluation of retail growth opportunities and strategic direction, retail market entry and expansion, and competitive market intelligence