EY: How Energy Providers can Adapt for Growing Demand
Electrification is accelerating dramatically, helping businesses to become more sustainable and prepare for the energy transition.
According to EY, 70% of business customers are set to dedicate more focus to energy.
From EV fleet expansion to data centres and AI use, this growth is causing business electricity demand to soar.
EY has detailed actions that energy providers can take to turn growing business energy demand into prosperity.
“The opportunity to support this soaring demand is a golden one for energy providers and the entire energy ecosystem, but they may not be ready,” writes Greg Guthridge, Global Energy & Resources Customer Experience Transformation Leader at EY, in the report.
“Years of stagnant growth and a focus on residential consumers mean many providers have become complacent, losing the capabilities to serve increasingly demanding business needs.
“Now is the time for providers to step up to help businesses realise their energy ambitions.”
Business challenges with energy providers
Seven out of 10 businesses surveyed by EY have a comprehensive energy strategy with clear actions and investments.
The top three energy challenges businesses face are financing and costs, complex regulation and energy providers.
Stability of energy supply is a priority and 64% of businesses said that volatile energy costs are already impacting profitability.
Around a third of businesses told EY they are not confident that their provider adds value and 74% said traditional customer service approaches offered by their provider are no longer good enough.
Greg writes: “It’s time for providers to rethink the service they offer – and to whom it is offered. In today’s businesses, energy is everybody’s business.”
Sustainable energy requirements
Reliability and affordability are top priorities in businesses’ energy needs, EY says, and sustainability follows close behind.
Nearly all of the businesses it surveyed have set energy goals centred on increasing the use of carbon free energy and reducing emissions.
A significant portion of businesses surveyed have plans to adopt solutions like large-scale generation, microgrids and on-site battery storage in the next three years.
Businesses told EY they will continue to go to energy providers for renewable energy and natural gas, but prefer other providers, like specialised solution providers and energy management companies, for everything else.
Collaboration could be the answer to some of these challenges.
“Smart alliances better support businesses to meet their energy ambitions in a sustainable way, while helping providers secure their own future,” Greg writes.
EY cites AES as an example. It has worked with different partners in different ways to meet the needs of customers, including creating battery storage for industrial applications with Siemens and partnering with Google to develop a carbon free energy data centre solution.
What businesses are looking for
Business customers prioritise the ability to meet their more nuanced needs when choosing an energy provider, EY says.
When considering energy providers, businesses ranked the top factors as energy resilience, expertise and innovation, support and customisation and energy options.
Nearly every business surveyed by EY wants energy providers to offer advanced digital tools and more than two thirds expect AI to be part of the experience.
In particular, businesses want AI to self-solve issues, analyse energy use and uncover deeper energy insights.
“With global electricity demand set to double over the next 25 years, strategic energy planning isn’t just smart, it’s mission-critical,” Steve Wanner, EY Americas Industrials and Energy Leader, says on LinkedIn.
“The successful leaders will reimagine energy from end-to-end, aligning it with both their business ambitions and the growing needs of their clients.”
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