Consulting firm Deloitte has released its Midyear 2020 Power and Utilities Industry Outlook with insights to help the sector navigate increased uncertainty and challenges due to COVID-19.
Although some of the trends around climate goals, distributed energy resources (DER) and growth will continue, the COVID-19 pandemic has catalysed the transition, according to the study.
The pandemic has highlighted the need for urgent strategic decisions concerning DER and growth opportunities.
The top external enabler for the energy transition is coordination with utility companies.
The top three trends to watch for within the power and utilities sector in the next six months include:
- Power and utility (P&U) companies may vault the bar on climate goals in 2020
COVID-19 seems to be a catalyst for carbon reduction, which the P&U industry could help sustain or accelerate over the next six months
The pandemic immediately raised the floor for renewable targets: Amid falling demand across all energy sources, solar and wind output increased 20% in the first quarter of this year, reaching record-high hourly shares and demonstrating that utilities can continue to reliably operate the grid when renewables dominate generation.
Furthermore, the pandemic exposed the health impact of emissions, compounding the climate concerns driving decarboniSation targets.
- Prospective demand upswing creates pressure for DER enrollment in DR
As the summer approaches and states start reopening to various degrees, increasing demand will likely pressure utilities to balance the higher share of renewable generation with demand flexibility via greater C&I and residential DER enrollment in DR.
- Crisis strengthens the case for growth via digital transformation, new services, and M&A.
Despite facing a pandemic-related revenue crunch, some utilities are in a relatively strong position to seize several new growth opportunities this year.
Declining sales and mounting arrearages have shrunk utility revenue, while operational spending on workforce protection has increased
Read more about the report.