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Duff & Phelps recently undertook a study of the power forecasting market to glean insights on the key drivers, competitive landscape and customers’ selection criteria when choosing a forecast provider. As part of our research, we interviewed more than 30 utilities and energy infrastructure investors in the U.S., Europe and Australia, as well as leading consulting providers in the market. This paper summarizes our key findings.
Our research found that the market is served by two sets of players, with overlap between the two:
Through our interviews, we identified three key modelling vendors. While these vendor’s models are not seen as overly complex to build, the data capture and cleansing, together with the experienced judgement on input assumptions, are the effective barriers to entry.
A large number of players providing consulting services to utilities and investors in the power market were identified through our interviews, including strategy consultants, engineering consultants, information research providers and more energy-focused consultants (both regional and national players).
The providers of price forecasts typically combine two types of business models:
Our interviews with users of power forecasts suggests a wide range of key purchase criteria (KPC), with the most pertinent being:
As countries around the world increasingly invest in renewable energy sources, power market consultants will have a critical role to play in advising and supporting this transition. We expect a number of strategic themes to play out over the next few years including innovative use of Software-as-a-Service business models as well as geographic expansion / consolidation.
Read more in our whitepaper here.
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