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Jan23

Competitive Electricity Procurement Market to Nearly Double to $56 Billion by 2020

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Electricity is a $360 billion per year market in the United States, with the vast majority of power sales still conducted through traditional regulated electric utilities.  Despite the failure of deregulation to take hold throughout the industry, as was expected in the 1990s, the past decade has seen tremendous growth in competitive electricity procurement by commercial, industrial, and institutional purchasers in 20 states and jurisdictions that allow retail access to open markets.  According to a new report from Pike Research, the competitive market is poised for further growth in the coming decade, and the market intelligence firm forecasts that competitive electricity purchases will nearly double from $29.4 billion in 2009 to $55.9 billion by 2020.

Managing the complexities of electricity procurement in a deregulated world put's increased responsibiliites on retail energy operations to optimize the way they do business - not simply to help reduce risk of under or over energy procurement but also to streamline operations allowing more competitive pricing and products to the consumer base. 

This operational efficiency drive was a major design goal of the PowerRunner FORrunner forecasting products that integrate with the Oracle Utilities Energy Information Platform.  The ability to look at both short and long term forecasting from a variety of 'aggregated' view points across multiple scenarios from the account level up offers Retail Energy companies a key tool in keeping ahead of the competition.

Attempting to run a competitive supplier business without the kind of forecasting instrumentation that PowerRunner FORrunner technology provides is somewhat akin to driving down the freeway with a blind-fold on!  From a financial perspective, erroneous energy purchasing or unprofitable customer acquisitions isn't realized until the settlements process completes and reconcilliation results in lost revenues. A detailed report containing  Pike Research's  findings can found  at Competitive Electricity Procurement Market to Nearly Double to $56 Billion by 2020.

Related Information:

FORrunner Short Term Forecasting 

FORrunner Long Term Forecasting

Bundled Short and Long Term FORrunner Forecasting

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Jan21

Show Me The Money - Where is the Smart Grid ROI?

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After several years and several billion dollars, will the smart grid show a return on investment? Can Energy Analytics provide the killer apps needed to extract value from the billions invested in smart grid infrastructure?

Show Me The Money - Where is the Smart Grid ROI?

 

Spearheaded in 2009, through $3.9B in grants funded by the American Reinvestment and Recovery Act (ARRA), investments in smart grid technologies across North America exploded. The ARRA investments were the catalyst that stoked the fire and utilities continue to fuel it through increased smart grid spending. Some recent estimates have smart spending ranging from $46B to $200B over the next 5 years. Regardless of what estimate you believe, there has already been a significant investment in smart grid infrastructure and many public utility commissions and rate payers are saying, “Show me the money”. After all the billions that have been spent, where is the return on investment? Some regulators are growning skeptical, leading to growing pressure on regulated energy companies to quickly demonstrate some reasonable ROI on smart grid investments.

 

Energy Analytics can provide the killer apps the smart grid needs to demonstrate measurable value.  Energy companies have to find ways to extract value from the enormous amount of data captured by smart grid technologies. This data deluge - the so called "Data Tsunami" - created by AMI and smart grid investments has created a growing demand for software and packaged analytic applications designed and preconfigured for the specific needs of the energy industry. A growing number of Energy Analytics companies are beginning to emerge with applications designed to help energy companies extract value from the reams of granular data captured by smart grid technologies.

 

Energy Analytics is quickly gaining interests from energy companies, IT companies, investors and industry organizations such as, Energy Central. In Q4 of 2011, Energy Central created a new practice called the Utility Analytics Institute. Their first publication, the Annual Market Outlook and Forecast Summary Report, projects energy analytics spending to reach $2B per year by 2016 . It is important to point out that the projected spending below is separate and apart from projected smart grid spending budgets.

 

UAI EA 5-yr spending

  Source: Energy Central-Utility Analytics Institute,  December 6, 2011

The ROI is in the data! But which Energy Analytics apps will extract the most value? Contrary to the opinion of some, downstream applications that can talk to my washer and dryer aren't the killer apps that will justify building out the smart grid. The greatest value for Energy Analytics will be realized in upstream applications that improve sytem perfomance, scheduling accuracy and asset management and optimzation. These are the Energy Analytics apps that will improve grids efficiency and reliablity and demonstrate the greatest ROI. 

 

 

 

 

 

 

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