Perspectives

Case Study

Developing a Utility-Centric Perspective on SmartGrid Opportunities for Suppliers

Industry & Client Situation

A leading global supplier of electrical products and services, focused historically on serving the commercial and industrial marketplace, became increasingly intrigued with opportunities in the utility industry anticipated from SmartGrid investments.  This supplier sought to enrich its understanding of utility needs, buying preferences, and supplier requirements to become better positioned to serve the utility marketplace. Once the U.S. Government lent its support to investments in energy efficiency, renewables, and conservation, as part of the $787 bIllion American Recovery and Reinvestment Act (“ARRA”), interest in SmartGrid-related opportunities increased dramatically, both among utilities and their suppliers. At the same time, the definition of “SmartGrid” proved elusive, and marketplace participants had differing perspectives when it came to understanding the scope, nature and pace of anticipated utility investments due to “SmartGrid.”

Approach

This supplier engaged Bridge Strategy Group to conduct a “Voice of the Utility Marketplace” diagnostic, with three objectives:

  1. To better understand utility infrastructure investment intentions, especially those linked to SmartGrid;
  2. To gain a better perspective on potential products, services, and solutions that the supplier could offer utilities; and
  3. To understand what utilities look for in a relationship with a supplier.

Bridge, leveraging its deep knowledge of and relationship with utilities, arranged for working sessions, ranging from 3–6 hours each, with representatives of seven investor-owned utilities. Typically the sessions consisted of 2–3 separate breakouts: one with representatives of Distribution and Engineering functions; one with senior executives (e.g., the head of Electrical Operations); and, where possible, one with technical staff, including those responsible for renewables, electric vehicles, and other “newer” technologies. These sessions were led and facilitated by Bridge, with managers and executives of the supplier actively participating.

Following these interviews, Bridge drafted and syndicated to supplier managers and executives, a final report summarizing:

  1. Utility infrastructure investment intentions and their linkage with SmartGrid;
  2. Products, services, and solutions that the supplier might offer utilities;
  3. What utilities seek and/or require from their suppliers; and
  4. Building on Bridge’s own deep experience working with utilities, the findings and implications for the supplier and its Utility and emerging SmartGrid Strategies.

Results

The supplier’s executives incorporated the emerging findings and conclusions from our utility marketplace, Voice-of-the-Marketplace interviews into its emerging Utility and SmartGrid strategies. In turn, Bridge proposed an approach to utility segmentation, based on the regulatory and legislative environment and the extent of utility integration across the energy value chain, that allowed the supplier to target utilities on a more meaningful basis.