Utilties generally are being transformed by the connected world, with energy companies, telecommunications groups and other service providers rapidly changing. The move towards the smart grid – a power grid that uses information and communications technology to gather and act on consumer use information – is leading to greater decentralisation within the grid, while the provision of internet services has transformed the telecoms industry.
These trends are bringing the digital revolution to the fore in corporate strategies, generating both excitement and fear among executives, and propelling interest in corporate venturing. Crispin Leick, managing director of Innogy Venture Capital, the corporate venturing unit of RWE Innogy, a unit of Germany-based utility RWE, said: “There has never been a faster-moving energy market. The changes in the market set-up for entrepreneurs are just great.”
This year we have named Innogy Venture Capital our most influential unit in the utilities sector. It has taken a thoughtful approach to corporate venturing under Leick’s leadership, and this has included securing an external limited partner (investor) in Conetwork Erneuerbare Energien.
Of note, following Innogy Venture Capital’s activity, RWE’s German rival energy provider Eon has also headed back into corporate venturing.
When asked what he thought the fast changes meant for big utilities such as RWE, Leick said: “You can call it a problem or call it an opportunity. In the news, every comment from the big companies is calling for a stable framework. Yet how can that happen when technology advances and changes occur so fast? It cannot. Innovation is driving change. Even if the politicians want it, this is just impossible – even if the Siemens chief executive says he wants a stable framework. Instead of calling for a stable framework, which is a little too easy, we should accept insecurity and try to be faster at taking opportunities.”
Corporate venturing units are often a key part of the strategy of utilities in keeping pace with the way their industries are becoming increasingly digital. To read the full article, turn to our August issue PDF.