A major transformation of utilities market is challenging traditional business and operational models. Accenture analysis of the likely demand disruption scenario points to a significant financial impact on the traditional utility model by 2025. Leading utilities are adapting to the chaining marketplace.

1. Strategic Perspectives on the Utilities
Consumer Marketplace

2. Solar will eventually replace nuclear and coal, and be
established as the default technology of the future to
generate and supply electricity,"
UBS Solar Report, July 2015
“Asian firms could be taking over Europe and American
companies at the cutting edge of battery technology…
building a $15.6 billion industry by 2024”
Navigant Research, February 2015
“In the next ten years, Asia will account for 65 percent of
growth in energy consumption worldwide...” renewable
energy offers leapfrog opportunities.
Singapore Business News, November 2014
“Renewables with battery storage due to reach grid parity in
large parts of the world within 15 years.”
Citigroup, Energy Darwinism II, September 2014
“Morgan Stanley estimates that Origin and AGL could see
reductions in earnings before interest and tax of up to $100
million in 2020, as consumers choose to store the output
from their solar arrays in battery storage.”
Morgan Stanley Australia, May 2015
“By 2025, everybody will be able to produce and store
power. And it will be green and cost competitive, i.e. even
cheaper than buying power from utilities.”
UBS, analyst note on EV and solar, August 2014
2Copyright © 2015 Accenture All rights reserved.
APAC Utilities – Strategic Perspectives on the Consumer Marketplace
For utilities globally it is a time of business unusual!

3. 3Copyright © 2015 Accenture All rights reserved.
A major transformation of utility markets is challenging traditional
business and operating models
Energy efficiency and cost-
competitive distributed
energy resources
Innovative and pervasive
digital technologies
Choice-conscious and
sophisticated customers
Availability of capital and
rising investments levels$
• Game-changing product
and services
• Lower barriers to entry
• Demand disruption
• Shifting competition
• Stranded assets
• Challenged business
models
• Make strategic choices on role and
scope of services in the market
• Invest in key capabilities in
preparation for the future model
• Protect earnings in the current
model and shape the migration to a
revenue new model
Move towards deregulation
and retail competition
Utility Operations Re-invention
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

4. Shifting Demand Age of Plenty Energy Consumerization
4
The traditional revenue models of utilities, gentailers and retailers
worldwide is shifting
Copyright © 2015 Accenture All rights reserved.
• Declining energy intensity of
major economies
• Investments in energy efficiency
• Cost-competitive renewables and
distributed energy
• Availability of mass-market EVs
and battery storage
• Excess supply and depressed
wholesale markets
• Zero marginal cost renewables
• Load / usage shifting away from
peak pricing
• Prosumer participation
• Lower barriers to entry with scalable
business solutions
• Switching made easy
• Extreme transparency of information
and offerings
• Rising competitive interest and
intensity
Electric Vehicles
Source: IEA Renewables Market, Frost & Sullivan, Tesla Giga-factory Forecasts
180 K 10 M
Number of
plugin-hybrid
& fuel cell
vehicles 2013 2020
Renewables
1,690 GW 2,555 GW
Global
installed
renewable
capacity 2013 2020
Energy Storage
0 GW/yr 35 GW/yr
Forecasted
Tesla Giga-
factory
Production 2013 2020
Signs of the Evolution Underway
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

5. 5Copyright © 2015 Accenture All rights reserved.
In most regions globally there is a decoupling of energy use from growth
as efficiency improves and some economies become more service based
Source: GDP – The World Bank Databank, Energy Intensity - U.S. Energy Information Administration (EIA) measured as Btu per Year 2005 U.S. Dollars (Market Exchange Rates))
0
10
20
30
40
50
60
70
80
9000
9500
10000
10500
11000
11500
12000
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Global GDP Vs.
Economic Energy Intensity
Energy
Consumption
per Dollar of GDP
Global GDP
(USD Trillion)
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

6. 6
Energy efficiency will continue to influence energy demand
Copyright © 2015 Accenture All rights reserved.
…and investment in efficiency continues to growEnergy efficiency is increasing…
Source: UK Department of Energy, US Department of Energy
50%
50%
75%
0
5
10
15
20
25
30
35
40
45
50
1990 1995 2000 2005 2010 2013
Global Investment in Energy
Efficiency ($BN)
Source: Bloomberg New Energy Finance – Includes residential, commercial , and industrial spending
Efficiency improvements of new homes, appliances and lighting
over the past 10-15 years
30%
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

7. 8.2 2,000
4.5
600 <3
<300
7Copyright © 2015 Accenture All rights reserved.
Declining costs of distributed energy are expanding consumer options
and displacing traditional energy demand
Source: The Economist, Rocky Mountain Institute, GreenTech Media, Accenture analysis
2009 2014 2020
Residential Solar Installed Cost ($/W)
& Lithium-Ion Battery Pack ($/kWh)
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

8. 8Copyright © 2015 Accenture All rights reserved.
Accenture analysis of the likely demand disruption scenario points to a
significant financial impact on the traditional utility model by 2025
Accenture modeling of residential and commercial demand scenarios1,2
US
Notes:
1. Excludes prosumer generation – 2. All scenarios incorporate projection of demographics, electricity price increase, deployment of energy efficiency technologies, PV costs, phasing of PV subsidies
in 2018 for EU and 2020 for the US – 3. Belgium, France, Germany, Italy, Netherlands, Poland, Portugal, Spain, Sweden, United Kingdom – 4. At current retail prices
Source: Accenture analysis
2 400
2 500
2 600
2 700
2 800
2 900
3 000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
TWh
Status Quo
Demand Disruption
Perfect Storm
$18bn4
160Twh
1,300
1,400
1,500
1,600
1,700
1,800
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
TWh
Status Quo
Demand Disruption
Perfect Storm
€39bn4
135Twh
EU-103
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

9. 9
Copyright © 2015 Accenture All rights reserved.
Shifting market dynamics and new technologies are increasing the role of
consumers across the value chain
Generation
Market
Operations Transmission Distribution Smart Meters
Consumers
& Beyond the Meter
Distributed
Generation
Prosumer
Megawatts &
Negawatts
Micro-grids &
Storage
Home
Energy
Mgmt.
Community
Energy
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

10. 2011-Ongoing2009
10
Accenture’s global energy research programs continue to track the
changing marketplace
Copyright © 2015 Accenture All rights reserved.
• >60,000 consumers surveyed in 26
countries
• >2,000 small/medium businesses
• Market insights and leading practices
from 80+ energy providers and 40+
cross-industry providers
• >150 utilities executives surveyed
across 20 countries
• Scenario modelling of impact of
distributed energy and energy efficiency
• Ongoing studies working with UN Global
Compact, World Economic Forum and
World Energy Council
2010 2011 2012 20142013 2015
2015201420132012
APAC Utilities – Strategic Perspectives on the Consumer Marketplace

11. 11Copyright © 2015 Accenture All rights reserved.
APAC Utilities – Strategic Perspectives on the Consumer Marketplace
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