Customer engagement will strengthen utilities’ growth

Investment Rating - The report emphasizes a customer-centric approach for energy suppliers and grid operators, indicating a positive outlook for companies that adapt to these changes [1][50]. Core Insights - The energy transition is reshaping the energy landscape, with end users becoming active participants due to advancements in technology and regulatory changes [3][4]. - There is a significant opportunity for energy suppliers to diversify their offerings and enhance customer lifetime value through non-commodity products and services [5][10]. - Grid operators face challenges in building customer-centric capabilities but are expected to develop new service offerings to support the energy transition [6][7]. Summary by Sections Customer Engagement and Opportunities - The rise of decentralized energy assets allows non-traditional companies to enter the energy market, increasing competition for traditional energy suppliers [4]. - Energy suppliers can leverage established relationships with customers to diversify into higher-margin services, thus improving growth and EBIT margins [5][10]. Implications for Grid Operators - Grid operators must adapt to a dynamic energy market by providing access to grid data and ensuring timely connections for new energy sources [6][7]. - The EU's DSO Entity has highlighted the importance of customer focus, leading to new service offerings and solutions [7]. Trends Driving Customer Centricity - The report identifies several trends, including a 22% average annual increase in photovoltaic capacity in the EU since 2010 and a 19% average annual increase in demand for carbon-cutting solutions in the Netherlands over the last decade [8]. - The energy landscape is evolving with technological advancements, regulatory pressures, and rising demand for sustainability, which are reshaping customer expectations [8][9]. Case Studies - Enel X has successfully diversified its offerings, contributing 5% to Enel's overall business within four years, showcasing the potential for growth in non-commodity services [10][11]. - Dutch grid operator Enexis has developed flexible connection contracts to optimize network utilization, demonstrating innovative approaches to meet increasing demand [13][14]. Recommendations for Utilities - Utilities should prioritize customer service offerings based on evolving customer needs and consider new revenue streams from adjacent energy products [16][17]. - A shift towards a customer-centric organization is essential, requiring utilities to reassess their customer segmentation and service delivery models [30][32]. Transformation Requirements - The report outlines six key enablers for organizational change, emphasizing the need for a cultural shift towards customer-centricity and the integration of digital processes [38][39]. - Energy suppliers and grid operators must invest in advanced CRM systems and digital self-service channels to enhance customer experience and support [46][47].