BOSTON – The most successful utilities in the 21st Century will be very different from those of the 20th Century. To remain competitive, U.S. utilities will need to provide cleaner, low-carbon electricity while enabling customers to better manage and reduce their energy use. Achieving this will require significant changes to the traditional utility business model.
That’s the core finding of Ceres’ new report The 21st Century Electric Utility: Positioning for a Low-Carbon Future, authored by Navigant Consulting. The report examines major trends reshaping the electric power sector, which is responsible for 40 percent of all U.S. greenhouse gas emissions. The report also examines the implications for investors and utilities’ business strategies going forward.
“The economics of electric power generation in the U.S. are changing dramatically,” said Ceres President Mindy Lubber. “The traditional paradigm of building large fossil fuel power plants to sell ever-increasing amounts of electricity is fast becoming obsolete. New business models must include aggressive energy efficiency measures and delivery of cleaner, low-carbon energy through renewable and smart grid technologies. Realizing these changes, as a handful of utilities have begun to do, requires a fundamental rethinking of how we produce, transmit and use electricity in the U.S.”
“The modern utility must expand its vision and adapt to changing circumstances by providing energy sustainably for our customers, communities and shareholders,” said National Grid U.S. president Tom King, in a foreword to the report. “This begins with addressing climate change, the seminal issue that impacts our global environment and economy today. As public utilities, we should make our business decisions and set our financial targets with climate change issues and carbon reduction goals at the forefront.”