Welcome!

News Feed Item

DNV KEMA's Retail Energy Markets Team Forecasts Competitive Power Markets to Expand

Small Consumer Demand Will Drive Competitive Power Market Expansion in Short Term

BURLINGTON, MA -- (Marketwire) -- 02/13/13 -- Competitive power markets will continue to expand aggressively in the next two years for homeowners and small businesses. Slower growth is expected in the non-residential segment over the same time period, according to the latest Retail Energy Outlook forecasts by the Retail Energy Markets Team at DNV KEMA Energy & Sustainability.

"Our analysis shows that retailers are seizing opportunities created by increased margins in these smaller markets," said Sonny Kanlier, Vice President, DNV KEMA's Retail Energy Markets. Residential and small commercial competitive market sales grew by 31 TWh (19%) over the past 12 months. DNV KEMA forecasts that trend to continue over the next 12 to 18 months.

A substantial increase in competitive retail suppliers entering restructured markets signals that residential and small markets are going to heat up. Competitive retailers are offering commodity prices with savings compared to the regulated utility rate, and customers are paying attention.

"This is indeed an interesting dynamic," said Hugo van Nispen, Chief Operating Officer, Americas Division. "Traditionally, the large non-residential market drives competitive sales. Now it appears that a growing number of retailers are beginning to focus on the mass market, a market many tended to ignore in the past."

Competition for smaller energy consumers intensified last year in Illinois, Ohio, and Pennsylvania. In Illinois, voters in over 300 communities adopted municipal aggregation referenda last year that allow them to pursue opt-out aggregation deals with competitive suppliers, who will provide savings to residential and small business customers compared to their incumbent utility provider.

Significant residential and small commercial switching to competitive retailers also took place in Pennsylvania, Maine, and New Hampshire in the past 12 months.

"Maine is an especially interesting story," Kanlier noted. "Less than two percent of the residential market had switched to competitive providers historically, though Maine consumers have had choice since 2000. Favorable retail margins, effective social media and grassroots customer acquisition strategies have enabled a small startup to make unprecedented inroads in this market. Currently, nearly 30 percent of the small customer segment in Maine is competitively served. That's an impressive growth."

In the non-residential market segment, steady growth continued in Illinois, Pennsylvania, and Ohio. In Ohio, the Commission adopted a hybrid approach to the contentious AEP capacity recovery mechanism for customers on competitive retail supply, which means good news for some retailers. Essentially, this will create a level playing field for retailers, which will boost migration rates, especially through May 2013.

DNV KEMA expects that New Jersey and some New York markets will improve shopping rates for mid-sized commercial customers with the lowering of hourly price thresholds.

"These developments mean that there are significant short-term opportunities for retailers and large end users alike in some markets," van Nispen said. "For competitive retailers, it means that effective marketing strategies could lead to increased market share and long term customer relationships, if done properly. For large consumers, it means opportunities to lock in better prices for a longer period of time."

Growth prospects have led to an increase in the number of retail supplier licenses granted, with the greatest number of new entrants in Ohio, Pennsylvania, and Illinois. "These increases are due to a combination of favorable retail margins, pro-competition policies, and opt-out municipal aggregation opportunities," Kristie Deiuliis, report author and principal consultant for DNV KEMA's Retail Energy Markets Advisory Service, observed.

DNV KEMA projects a 6.6 percent compound annual growth rate (CAGR) in the total U.S. competitive market over the next two years, and flat to modest growth (1.7% CAGR) in the following years due to increased upward pressure on power prices. By 2017, DNV KEMA forecasts non-residential competitive sales to reach 622 TWh, a growth of 51 TWh from 2012. More than half (57%) of this growth is expected to occur in the next two years.

Overall, DNV KEMA estimates that the total competitive sales reached 740 TWh in 2012, representing 56 percent of the eligible market, and 20 percent of all U.S. power sales. In 2013, DNV KEMA expects that competitive sales volume will increase by 26 TWh, or 3% from 2012.

For 2014 and beyond, a considerably slower growth rate of 1.3% CAGR is forecasted, with non-residential markets returning to the driver's seat in competitive retail sales. "After 2014, we expect residential markets will be flat or slightly declining," Deiuliis said. Yet, some markets such as Illinois, Maine, and New Hampshire will continue to grow at a rapid pace. "We do not expect markets that have shown growth the last few years to retrench."

About DNV KEMA Energy & Sustainability
DNV KEMA's Retail Energy Practice provides a wide range of strategic and technical consulting services to organizations involved in competitive power and gas markets. DNV KEMA's Retail Energy Advisory Service provides a current, detailed knowledge base of the opportunities and risks in competitive markets. DNV KEMA also leads an industry benchmarking collaborative that develops performance data and comparative analysis for retail suppliers. DNV KEMA's assignments range from strategic planning and market analysis to operational gap analysis and process improvement to customer research and product design.

DNV KEMA Energy & Sustainability, with more than 2,300 experts in over 30 countries around the world, is committed to driving the global transition toward a safe, reliable, efficient, and clean energy future. With a heritage of nearly 150 years, we specialize in providing world-class, innovative solutions in the fields of business & technical consultancy, testing, inspections & certification, risk management, and verification. As an objective and impartial knowledge-based company, we advise and support organizations along the energy value chain: producers, suppliers & end-users of energy, equipment manufacturers, as well as government bodies, corporations and non-governmental organizations. DNV KEMA Energy & Sustainability is part of DNV, a global provider of services for managing risk with more than 10,000 employees in over 100 countries. For more information on DNV KEMA Energy & Sustainability, visit www.dnvkema.com.

Add to Digg Bookmark with del.icio.us Add to Newsvine

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
In his session at Cloud Expo, Alan Winters, an entertainment executive/TV producer turned serial entrepreneur, will present a success story of an entrepreneur who has both suffered through and benefited from offshore development across multiple businesses: The smart choice, or how to select the right offshore development partner Warning signs, or how to minimize chances of making the wrong choice Collaboration, or how to establish the most effective work processes Budget control, or how to max...
Interoute has announced the integration of its Global Cloud Infrastructure platform with Rancher Labs’ container management platform, Rancher. This approach enables enterprises to accelerate their digital transformation and infrastructure investments. Matthew Finnie, Interoute CTO commented “Enterprises developing and building apps in the cloud and those on a path to Digital Transformation need Digital ICT Infrastructure that allows them to build, test and deploy faster than ever before. The int...
China Unicom exhibit at the 19th International Cloud Expo, which took place at the Santa Clara Convention Center in Santa Clara, CA, in November 2016. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE FDD, TD-LTE), fixed-line broadband, ICT, data communica...
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning infra...
SYS-CON Events announced today that Ocean9will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Ocean9 provides cloud services for Backup, Disaster Recovery (DRaaS) and instant Innovation, and redefines enterprise infrastructure with its cloud native subscription offerings for mission critical SAP workloads.
MongoDB Atlas leverages VPC peering for AWS, a service that allows multiple VPC networks to interact. This includes VPCs that belong to other AWS account holders. By performing cross account VPC peering, users ensure networks that host and communicate their data are secure. In his session at 20th Cloud Expo, Jay Gordon, a Developer Advocate at MongoDB, will explain how to properly architect your VPC using existing AWS tools and then peer with your MongoDB Atlas cluster. He'll discuss the secur...
Things are changing so quickly in IoT that it would take a wizard to predict which ecosystem will gain the most traction. In order for IoT to reach its potential, smart devices must be able to work together. Today, there are a slew of interoperability standards being promoted by big names to make this happen: HomeKit, Brillo and Alljoyn. In his session at @ThingsExpo, Adam Justice, vice president and general manager of Grid Connect, will review what happens when smart devices don’t work togethe...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Deep learning has been very successful in social sciences and specially areas where there is a lot of data. Trading is another field that can be viewed as social science with a lot of data. With the advent of Deep Learning and Big Data technologies for efficient computation, we are finally able to use the same methods in investment management as we would in face recognition or in making chat-bots. In his session at 20th Cloud Expo, Gaurav Chakravorty, co-founder and Head of Strategy Development ...
DevOps is often described as a combination of technology and culture. Without both, DevOps isn't complete. However, applying the culture to outdated technology is a recipe for disaster; as response times grow and connections between teams are delayed by technology, the culture will die. A Nutanix Enterprise Cloud has many benefits that provide the needed base for a true DevOps paradigm. In his Day 3 Keynote at 20th Cloud Expo, Chris Brown, a Solutions Marketing Manager at Nutanix, will explore t...
Imagine having the ability to leverage all of your current technology and to be able to compose it into one resource pool. Now imagine, as your business grows, not having to deploy a complete new appliance to scale your infrastructure. Also imagine a true multi-cloud capability that allows live migration without any modification between cloud environments regardless of whether that cloud is your private cloud or your public AWS, Azure or Google instance. Now think of a world that is not locked i...
Technology innovation is the driving force behind modern business and enterprises must respond by increasing the speed and efficiency of software delivery. The challenge is that existing enterprise applications are expensive to develop and difficult to modernize. This often results in what Gartner calls "Bimodal IT," where business struggle to apply modern tools and practices to traditional monolithic applications. But these existing assets can be modernized and made more efficient without havin...
Most companies are adopting or evaluating container technology - Docker in particular - to speed up application deployment, drive down cost, ease management and make application delivery more flexible overall. As with most new architectures, this dream takes a lot of work to become a reality. Even when you do get your application componentized enough and packaged properly, there are still challenges for DevOps teams to making the shift to continuous delivery and achieving that reduction in cost...