Commercial Customer Case Study
Arun Mani is a partner in Oliver Wyman’s utilities practice in Houston. He has over twenty years of experience advising utility clients around the world on issues ranging from strategy to business transformation. Prior to Oliver Wyman he was a partner with PA Consulting Group and a managing director with Huron Consulting. His current practice focuses on designing innovative business models and driving organizational change for utilities to future proof their business.
While utilities were worrying over concerns that solar power would siphon off revenues and hijack customers, another threat to the utility business model, energy storage, has been gathering strength.
Pinpointing the economics of energy storage is challenging. This is due to the highly tailored nature of potential value streams associated with an energy storage installation and to specific customer requirements.
However, it would suffice to say that recent declines in the costs of energy storage have been sufficient to allow businesses and homeowners to economically store electricity for a few hours. It is long enough to disrupt peak demand charges that many utilities rely on for their cash flows.
Rather than resisting this technology, forward-thinking utility executives are using long-standing customer relationships, especially at the commercial and industrial level, to understand power requirements and system operations. In order to integrate new technologies in ways that benefit both the customer and the utility.
Failing to do so could put billions of dollars of annual revenue at risk for the utility sector.