Navigant Research Blog

European Utilities Have Increased Their Activity in New Energy Platforms: Part 1

Alexandre Metz — February 1, 2018

The energy industry is experiencing a profound transformation as the sector moves towards the more intelligent, more distributed, and cleaner use of electricity. Utilities’ traditional business models are being challenged by disruptive firms offering new services leveraging new technologies. In this post, I describe how European utilities have significantly reinforced their strategic interest in new energy platforms. In the next post, I will highlight the key regional differences in new energy platform activity between North America and Europe. Finally, I will argue that some of the new energy platforms have been highly active recently as European utilities strive to build their portfolio of digital services.

Partnerships, Investments, and Acquisitions

The underlying analysis used here was built upon a methodology that I developed for a previous blog. I analysed the level of activity of the same eight major European energy utilities and grouped their strategic announcements into the six emerging energy platforms. This update reflects an extension of the time period analysed and a refinement to the categorisation of announcements. 2017 announcements were added, extending the time range to 2015-2017, and the categorisation was extended to differentiate between minority stake investments and majority stake acquisitions. Utility announcements were grouped into three categories: partnerships, investments, and acquisitions.

(Source: Navigant Consulting, Inc.)

New Energy Platform Activity

Most European utilities significantly reinforced their position in new energy platforms over the course of 2015-2017 (see the figure above).

Italy-based Enel has emerged as the most active of the selected European utilities. Enel’s most significant announcements in 2017 included partnerships with car makers (Audi, Groupe PSA, and Nissan) and electric utilities (Dubai Electricity and Water Authority, Rosseti, and Saudi Electricity Company) and acquisitions of battery storage management system provider Demand Energy, demand response (DR) service provider EnerNOC, and EV charging platform provider eMotorWerks.

France-based ENGIE and UK-based Centrica have been focusing on acquisitions. In 2015-2017, ENGIE led six major acquisitions of companies offering new energy platforms. Deals concluded in 2017 included EVBox, an EV charging infrastructure developer, and Fenix, a connected solar PV solutions provider in Africa. Centrica has been steadily acquiring a similar number of digital players. The utility recently took control of REstore, a DR service provider in Western Europe, and Rokitt, a data discovery and analytics provider based on the US East Coast.

Other utilities, including E.ON, Innogy, and Total, have led strategic investments and partnerships. E.ON and Innogy have been developing partnerships with companies offering new energy platforms. E.ON has been leading a joint initiative of over 30 energy suppliers with software company Ponton to develop Enerchain, a decentralised European marketplace for electricity trading using the blockchain. Innogy signed a groupwide cooperation with Kiwigrid to develop new services, such as industrial energy monitoring and vehicle-to-grid integration systems. Total Energy Ventures added eight new energy platform companies to its investment portfolio in 2015-2017. The latest additions include France-based Xee, a connected vehicle platform providing predictive maintenance and pay-as-you-drive insurance solutions; and Spain-based OnTruck, a road freight shipping platform optimising truck utilisation.

Vattenfall and EDF have remained the least active of the selected European utilities. Vattenfall made a strategic investment in Northvolt to help the Sweden-based company build Europe’s largest battery storage manufacturing facility. EDF recently established an in-house venture capital arm. It complements independently managed venture capital fund Electranova Capital, through which EDF holds an indirect stake in startups. One can therefore expect more investment activity by EDF from 2018 onwards.

In the next post of this blog series, I will highlight the key regional differences in new energy platform activity between North America and Europe.

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