While the 2023 fiscal year was still economically successful for most municipal utilities, it is becoming apparent that this will not continue in the coming years. In a municipal utility study, only 37 % of respondents forecasted good business for 2024, which looks quite similar to the current year. This is mainly due to continuing cost pressure and high investment costs, which will have to quadruple in the next decade for the energy transition to succeed. [1] [2]
The municipal utilities are, therefore, under immense pressure. The upcoming two to three years will decide whether they are up to the challenges and obstacles and can turn them into opportunities. After all, the restructuring that goes hand in hand with the transformation of the energy industry also opens up opportunities for the renewal of municipal utilities.
To achieve such a successful renewal, a clear strategy and targeted prioritization in the development of the business areas are required.
The social, economic, technological and regulatory changes in the energy industry also significantly impact the end customer market of municipal enterprises. Increasing customer demands require flexibility and the ability to recognize and serve changing needs. Service providers who can excel here will prevail in the long term. Those who cannot keep pace must expect existing customers to migrate elsewhere. [3]
This means that municipal utilities must continue to develop their existing and previously fundamental business areas, such as the sale of electricity, gas, and water, while simultaneously creating new products and services. It's a mammoth task. It is not only associated with high costs but also represents a significant effort for all employees, given the ongoing shortage of skilled workers.
On the ‘plus’ side, municipal enterprises often enjoy high trust among the population and are the preferred partners for the energy and heating transition. [3]
A recently published survey of 100 managing directors and board members of municipal utilities and energy supply companies in Germany shows that municipal utilities will primarily deal with topics such as the communal heating transition, personnel development and digitalization in the coming years (87 % in all cases). Only half of those surveyed stated that developing new business areas is a priority for their municipal utility. [4]
This attitude seems difficult to understand when considering the competitive dynamics and the effects that can already be felt today. However, a successful transformation of municipal utilities can only succeed if all transformation tasks are tackled equally.
Fichtner IT Consulting and Intuity Media Lab are strong partners for developing innovative energy solutions. Together, we enable you to become a provider of municipal solutions.
In our 2-day workshop “Municipal Utilities of the Future”, we invite you to question the status quo of your established business systems and processes. Together with local stakeholders and interest groups, we consider your municipal future and the interplay of energy, heat, industry, mobility, and society. We identify new fields of opportunity, from municipal heat planning, CO₂-neutral mobility and smart city solutions to flexibility marketing, citizen participation and AI applications. You benefit from the synergies between in-depth IT know-how and practice-oriented innovation expertise.
Do you want to make your municipal utility future-proof?
The source texts are unfortunately only available in German.