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Power Shift: Why Utilities Will Run More Like Uber and Airbnb

August 09, 2016

Over the next decade, the ability of utilities to adapt to an increasingly network-based energy infrastructure will become much more important.

by Alan Hsu, Portfolio Manager and Global Industry Analyst for Wellington Management


 

In coming years, power markets will be challenged by two structural dynamics: the increasing penetration of decentralized, distributed renewable resources and the need to eliminate grid inefficiency. Both of these trends will push the industry toward promoting and developing innovative, flexible, and far more efficient solutions for the generation and distribution of power. In my view, successful regulated utilities will be those that incorporate smart technology, evolve rate designs, reduce their carbon footprint, become “asset lighter,” and integrate resources to a far greater extent than they do today. In so doing, many will run more like Uber Technologies and Airbnb, leveraging their network infrastructure to more efficiently deploy excess capacity and increase resource value.

 


 

All investments are subject to risks, including the possible loss of principal. Investments focused in specific sectors of the securities markets may cause performance to be sensitive to developments affecting companies in those sectors.

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