WEBVTT

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- [Narrator] Energy and power providers

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face choices that can truly
make or break their companies,

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depending on how they respond
to some very acute challenges.

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The imperatives of decarbonization
and sustainable energy

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have created new market environments

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nearly everywhere in the world.

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And new regulatory regimes
have some major implications

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for the present and future
of companies in this sector.

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- Even in emerging markets,

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growth from electrification
will be largely offset

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by energy efficiency.

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In mature markets like that of the US,

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there may be no growth
at all in power demand,

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and demand for gas is likely to shrink.

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Substantial efforts across
the entire utility value chain

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are required for companies to
cut costs and lower prices -

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while ensuring security of supply.

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Affordability of energy and power is,

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and will remain, a major issue everywhere.

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As a result,

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government regulation is likely
to de facto cap the ability

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of all energy and power company
to pass through their costs.

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- Power grids need to be equipped

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to deal with the variable
loads occasioned by renewables.

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Power systems need backup capacities

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that are both decarbonized

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and capable of ensuring
security of supply.

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We need infrastructure, such
as electric car charging,

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heat recuperation networks,
hydrogen and CO2 transmission.

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And companies must invest
in these at the same time

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that growth and margins are
being severely constrained.

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So what will leading energy
and power providers do

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to meet these challenges?

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It won't be easy for companies to maintain

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the financial muscle to
invest in new infrastructure,

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because growth in their
current businesses and profits

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are effectively capped.

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So the winners will be those
who become much more efficient

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and effective in their operations
and capital deployment.

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This is all the more important

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because competitiveness will be crucial

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for winning in new growth areas.

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- The leading energy and power companies

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are those that get the
maximum impact from technology

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to become more efficient and competitive.

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Too few digital or AI initiatives today

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deliver their full potential.

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Getting impact from technology implies

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attracting the right talent,

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genuinely reviewing its operating model

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in sync with the technology,

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and providing more
autonomy and accountability

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to teams close to the action.

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- Successful energy and power players

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also determine in which growth areas

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they can become legitimate competitors.

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The potential growth areas
exist in building new networks

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or developing new infrastructure
for use with renewables.

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When they have determined
in what new growth avenues

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they can win, success will require

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focused managerial attention,

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discipline in capital allocation,

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agile operating models,

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and developing the right capabilities.