Among the major European energy companies, some are distinguished by new and more proactive modes of action. I chose 6, which made different choices and took seemingly different routes. Their strategic options are to be closely watched to understand and imagine the future of energy in Europe.
All these energy companies put innovation at the center of their concerns because they want to bring disruptions, differentiation and value to their customers. Digitalization and decarbonisation are common directions followed by all. Their target customers include cities and local governments, which they call a major concern.
The creation of ENEL X in 2017 is a unique movement showing ENEL’s desire to quickly change its positioning. ENEL X is a full-fledged company delivering “energy-as-a-service” solutions to the four key targets of residential customers, industry, cities and mobility.
By creating a dedicated company, ENEL is freeing itself from some difficulties of an internal transformation and from a coordinated and consistent management of very different activities in terms of culture, sales methods and decision-making.
ENEL X will not avoid the difficulties of integrating potential acquisitions (EnerNOC, eMotorwerks, Demand Energy) but it is already a few months after its creation a spearhead to follow.
It will be interesting to monitor the impact of this model chosen by ENEL on the creation of a new culture, appropriate to the present stakes with an adaptation of the modes of action, sales and decision.
Like ENEL X, E.ON focuses primarily on customer solutions but chooses to manage an internal transformation.
E.ON has organized itself “aggressively” to develop and bring innovations. Innovations sometimes face traditional difficulties, especially to be “transferred” to operational teams. There are nevertheless remarkable achievements like the SolarCloud.
An internal transformation leads, if it is successful, to a normally more sustainable evolution but it is slower and gives rise in the short term to a more “constrained” innovation often taking into account the impacts on the existing activities and offers.
It will be instructive to compare, in the years to come, the results of E.ON and those of ENEL X.
In the case of E.ON, the strategic interest of refocusing on networks and customer solutions and the way to drive the internal transformation will have to be followed.
Unlike ENEL X and E.ON, Engie remains a global player, supplier and producer of energy. This should give it greater legitimacy with local communities and industry.
Engie has made the preliminary choice of proactive and clear political and strategic orientations, widely communicated, and is positioned as the leader of the energy transition and green energies and as a privileged partner of its customers.
Engie very quickly declined these orientations on its portfolio of activities and assets, largely overhauled for 2 years. Engie also begins an internal transformation.
Unlike other companies mentioned in this post, Engie has a regional or global leadership position in many activities: electricity, gas, energy services, heat networks and water and waste treatment through its participation in the Suez group. This portfolio of activities is an important advantage for developing local solutions and supporting cities. But it will be necessary for Engie to develop its capacity to act locally: this issue is also clearly identified by the group.
The relevance of the business strategies, the distance that these strategies will take with the culture of certain branches of the group, the way in which the internal transformation will be conducted, the development of the capacity to act locally (especially at the city level) and to be perceived as a local actor, are all centers of attention and interest.
British Gas has been deploying an innovative strategy for its residential customers over the last few years, based on two fundamentals: a highly service-oriented offering and a Smart Home offer: Hive.
British Gas may have a less global approach than the previous three companies, but the relevance of energy supply to individuals is still a topical issue.
The performance of British Gas’s residential offers is therefore of particular interest to enlighten the way of many energy companies.
Fortum is an energy company that, in recent months, has drawn attention to its power generation activities, including the acquisition of Uniper to E.ON. Fortum became one of the first European producers on this occasion. Electricity generation is now its main activity.
But Fortum is also an electricity supplier and a major heat producer, distributor and supplier.
He is very innovative and has made digitization one of the pillars of his transformation. With its strong involvement in heat networks, energy production, electric mobility and waste treatment, it is positioning itself as an interlocutor with local authorities and cities.
His success in this field and the path he traces in terms of digitalization will be particularly important to track in the coming months.
Finally, I end up with Total, leader of the oil sector, which, in 2016, decided to diversify and become, in France at least, the 2nd largest supplier of gas and electricity.
Total explores a low-traffic route: the creation of an electricity and gas energy company starting from almost nothing, with significant resources that have led to an impressive series of acquisitions: Lampiris (2016), Greenflex (2017), EREN RE (2017), Direct Energie (2018) followed BHC Energy acquired in 2014.
It will be particularly useful to see how the integration of different acquisitions will be conducted, how a culture, a consistent offer and a new sales approach can emerge from this thunderous start.
The 6 examples I have taken are not the only ones to be observed: very innovative small energy companies will certainly have a more local role to play and will be sources of inspiration that should not be neglected. But I am sure that the energy ecosystems will be structured around some leaders, some platforms that have managed to win. And I will not be surprised that some of these six energy companies are still standing out in the near future.
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Eric Morel is a worldwide recognised expert of energy transition and digitalisation. In the past, he has served as VP Corporate Business Strategy and VP Global Smart Grids and Energy Efficiency at Schneider Electric as well as CEO of Ilevo, a telecommunication start-up. He is a founding member and a former Board member of the Gridwise Alliance, the main professional private/public association dedicated to Smart Energy.