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Disruption in the Power and Utilities Sector

Disruption in the Power and Utilities Sector

Full Title: Disruption in the Power and Utilities Sector
Author(s): Deloitte
Publisher(s): Deloitte
Publication Date: April 1, 2016
Full Text: Download Resource
Description (excerpt):

Take our electricity—please.

Paying customers to use your product is hardly a sustainable business model. Yet that’s precisely what happened in Germany on June 16, 2013. When renewable energy generation soared to 61 percent of electricity output, the wholesale price plummeted to minus €100 per megawatt hour (MWh). The supply of energy so exceeded demand that—yes—utilities were paying others to take their electricity.

The repercussions? Significant value erosion, write-offs, investor backlash, and intense pressure on executives to make tough strategic choices about the future. It also signaled an about- face in the utility sector with the German market becoming increasingly—and irreversibly—dominated by renewables. In July 2015, 78 percent of the nation’s power was generated from renewable resources.

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