Historically, our economy focused on extracting raw materials (gold, wood, cow and so on). Willing to transform these raw materials for some end-use purposes (luxury, transport, feed and so on), firms started selling goods as more or less differentiated products (jewels, boats, steak and so on). Then, firms move to services (fit jewels and clothes, offer mobility, serve hamburger in your favourite fast-food restaurant and so on). The natural evolution is to provide experience to end consumers (feeling pretty, enjoying a nice trip in a train where you can dance like in a club, enjoying tasty food in a very practical environment).
In this very good Reuters article, Jason NEELY (REUTERS) sets out to show that Utilities’ volume-based model is no longer a sustainable profit-making vehicule, and that Energy Efficiency solutions providers start capturing the value from Utilities.
Here is a non exhaustive wrap-up of this article:
– European Utilities could be very affected by the decline of their energy revenues.
– As an example and according to Bain, “the big four [German] Utilities will lose about a third of their annual operating profits from generation […] by 2020”