The recent years have been tough for many distribution businesses. A combination of regulatory pressure, disruptive energy technologies, increasingly complex operations, shifting consumer dynamics and weak demand—particularly in higher-income markets—has squeezed profits and stymied earnings growth.
The rise in distributed renewables is not only impacting total electricity demand, but also requires massive investments in new connections and grid reinforcement. Traditional distribution efforts are also shifting as distributed energy resources (DER) proliferate, changing demand profiles including total demand reduction or stagnation, but without a commensurate decline in peak demand. Growing customer expectations mean distribution businesses must actively manage participation, such as in demand response, and provide network access to prosumers. Mass adoption of electric vehicles (EVs) is poised to alter demand growth and put pressure on grid stability.
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