Canadian energy and utility firms lagging in new energy model adoption

Canadian energy and utility firms are lagging in their adoption of new energy models (alternate fuel, clean energy, energy storage, etc.) according to a recent survey from Capgemini. The technology consulting firm polled 530 industry executives across 12 countries in August and September.

Most Canadian and energy utility firms (78%) agree that if they don’t implement new energy business models they will be wiped out. Consequently, 74% agree that new energy business models will become their mainstream business in the next five years.

Despite this favourable attitude, only a quarter of Canadian firms (24%) said they are currently testing the market with new energy business models – lower than the global average of 30%. Among those who have taken the plunge, the most popular options were alternate fuels, energy platforms, and mobility services and infrastructure.

Only 8% of Canadian firms said they have a comprehensive global strategy for implementing new energy business models, complete with goals and timelines.

“We found that energy and utility organizations are highly alive to the need to switch to new-energy models – i.e., new products, services, and ways of operating existing businesses,” the Capgemini report noted. “Overall adoption of these models remains low.”

Companies that have already shifted to new energy models expect numerous benefits, including boosted revenue and new customers. Canadian firms reported a 5.6% increase in new customers, the highest of any country, and well above the global average of 3.7%. Canadian energy and utility firms expect an 11.2% increase in revenue from implementing new energy models in the next three years, similar to the global average.

Emission reduction is another important benefit. Global companies reported a 4.6% reduction in scope-3 emissions and project a further reduction of 13% in the next three years.

Capgemini says that in order to close the implementation gap, energy and utility companies need to take a multi-pronged approach that includes pilots and testing for multiple models to identify areas of competitive advantage. This approach requires fostering a culture of innovation, engaging with external innovation ecosystems, creating strong governance mechanisms, and building a strong data and technology foundation.