The renewables revolution is forcing the energy industry to evolve. Change brings opportunity, and bold players stand to make significant revenue gains by wading into this new world.
Our reliance on conventional forms of energy is rapidly evolving as countries and companies that have traditionally relied on a single source for revenue are diversifying into new types. Firmly rooted industry players expand their businesses into renewable energy while newcomers are also getting into the game. The changing landscape is clear: The market is evolving to meet end-consumers' demand.
This shift is good for the established players who have the resources to create the marketplace and define the product offering. And it's also beneficial for the new arrivals, which can innovate great technology and possibly get acquired by the conventional companies that have defined the market.
Increasing demand is generating great opportunities for bold actors to launch and incubate energy startups inside of their companies. These internal startups will benefit from the parent company's balance sheet and brand recognition.
GE and Lockheed Martin are cases in point. They're both leveraging their brand to get into the space with energy startups inside of their corporate structure. GE recently launched Current, which combines data from industrial applications with the Predix industrial internet analytics platform to optimize energy consumption. Lockheed Martin is following a similar path to GE by combining their energy products and technologies into a single commercial line called Lockheed Martin Energy. The company's effort will focus on clean, renewable energy sources that will help it meet the Department of Defense’s request for the addition of 3 gigawatts of renewable energy.
While these two major corporations are leading the transformation of the energy industry from a commercial perspective, the relationship with the end-user is also evolving.
Here are three ways how the end-user's relationship with energy is changing:
- Smart Grids
As society moves to an always-connected, always-on society, the smart grid will play a critical role in the adoption of energy innovations. Being connected to automated two-way secure network infrastructures, smart grids will save energy, reduce costs and increase the reliability of always-on electricity.
Automated network infrastructures can act as routers and derive energy from multiple renewable sources like solar, ocean and wind depending on the location and climate.
And when commercial or residential end-users are generating more power than they are using, they can sell the excess back to the grid or store it in a battery pack like Nissan’s xStorage system.
- Renewable Energy
In 2015, 13 percent of electricity in the United States was generated from renewable energy sources. The Energy Information Administration expects total renewables used in the electric power sector to increase by 11.3 percent in 2016 and by 4.4 percent in 2017.
Renewables' growth demonstrates a bullish sign for the electric-vehicle industry, which will account for 35 percent of global new car sales by 2040. The growth of electric car sales combined with the overall growth of renewable energy is a clear indicator that end-users' energy consumption habits are changing.
- Energy Storage
With the development of the smart grid and increasing reliance on renewable sources, energy storage will become a growth market for companies who develop battery technology. End-users will no longer have to rely on natural-gas backup generators to avoid power outages. Instead, they can now install a Tesla Powerpack or other similar storage products, which are infinitely scalable for large enterprise solutions, and connect them to alternative sources like solar panels.
With our energy consumption patterns changing and end-users diversifying into new sources of energy, the opportunities for growth in the energy industry are becoming truly endless.
(Top Image: Courtesy of Thinkstock.)
Grayson Brulte is the Co-Founder & President of Brulte & Company, an innovation advisory and consulting company that designs innovation and technology strategies for a global marketplace.
All views expressed are those of the author.