Mercatus joined Bloomberg New Energy Finance for their signature Future of Energy Summit this past April in New York City. Now in its tenth year, this year’s show was the largest and most diverse yet, with over 1,000 attendees present from across the energy sector, including politicians, regulators, investors and more. New participation signalled major growth, given that just a few years ago the summit was still considered a ‘new energy’ or renewables-only conference. In addition, new representation in natural gas, storage, IoT and energy trading proved just how advanced and diverse our industry has become.
This year’s event had a new focus on a variety of new and controversial subjects. Policy and regulation, consumer demand, and emerging technologies and regions took on an increased role in light of the recent major changes in political regimes and market dynamics. With many new changes yet to come, this was perhaps the most important view into of the future of energy that we have seen to date. As a sponsor of this year’s event, here are our top takeaways.
Confronting Oversupply in “the Age of Plenty”
New Investments in Advanced Technologies and Emerging Markets
Uncertainty in the Face of Political Change
Transforming Business Models in a Growing Industry
With the rise of renewables and the onset of distributed generation, power producers are experiencing unprecedented challenges on multiple fronts. Customers are now demanding clean energy options while still paying the lowest prices, and utilities are working to meet these demands while adhering to environmental regulations. All of this becomes increasingly difficult as power pricing structures become more complex, and the uncertain future of tax equity affects supply and demand. As energy companies incorporate more technologies and solutions, their businesses have become increasingly complex and costly. As one executive noted, investors expect utilities to transition to renewables while still continuing to deliver earnings and growth.
As a result, business model transformation and digital innovation have taken a stronger priority. The role of IoT and digital platforms are increasingly becoming important as companies look to reduce costs and overhead while still maintaining growth. “In distributed generation, you absolutely cannot scale without a strong IT platform,” explained Haresh Patel, who spoke to the importance of digitalization on one of the technology panels. While the onset of new technologies and changing market dynamics are making it increasingly difficult for business to sustain, the ability to be flexible and to take advantage of new opportunities is crucial – whether you’re a small IPP or a large regulated utility. Having a digital strategy in place is critical to achieving this, as streamlined business processes will better allow them to assess new opportunities in the market and increase their capacity. Digital solutions will also better ensure compliance, mitigate risk and meet investor obligations. In the long run, the businesses that have a strong digital framework in place will help them to scale and adapt to the ever-changing market dynamics that we’re continuing to see into the future.
It was evident from the New York Summit that the clean energy sector has come a long way in terms of influence. From advances in technology, financing and digital innovations, the clean tech sector is well on it’s way to becoming a mature asset class. However, there is still a ways to go in terms of thinking and innovation, as Michael Leibreich pointedly said, “In my view, America has never not been great. Businesses must continue to develop and deploy great technologies.” Despite the changing market dynamics or challenging political forces, the sector must continue to brace itself in the face of adversity. The energy companies that are proactive, strategic and innovative will be well positioned for success, no matter what comes their way.