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The Energy Company of the Future

November 2017

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Maximizing value in tomorrow’s energy market

Energy companies are in the midst of a profound transformation. In this changing energy world, companies can create real value and protect long-term revenues by considering their portfolio of assets and how they are structured.

 

Restructuring to Create Value

Does the integrated energy company still make sense? In Europe, a number of utilities have carved out parts of the value chain to form new companies, each with a clear focus. innogy Consulting advised European multi-national utility RWE on the segmentation of its retail, infrastructure, and renewables business to create a new business. Twenty-five percent of this newly formed entity was floated on the stock exchange, to bring in additional resources for RWE’s existing business. This restructuring created a far more customer-centric company while unlocking approximately $22 billion (€20 billion) in market value, providing capital for investments such as customer experience improvements. 

 

Smart Company Focus

The strategy and structure a company selects for future success will depend on its long-term vision, the condition and regulation of its market, and the anticipated developments in that market.

Energy companies should consider what technologies would improve their portfolios. Look not only to fields that align with core business, such as energy storage and distributed energy resources (DER), but also further afield at parallel industries, such as plug-in electric vehicle infrastructure.

As costs for renewable energy resources continue to decline and regulated businesses continue to provide stable and lower-risk revenue, companies also should consider increasing investments in these areas.

Companies should look at the assets they own that represent a longer-term risk, and consider divestment, enabling them to focus on new products and business models.

 

A Critical Question

Now is a great time to ask: Is our structure that of the energy company of the future? Are we meeting our customers’ needs? innogy Consulting helps energy companies like yours make these decisions every day. To find out more read about our capital market positioning service.

 

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