News on 18 October 2000
The use of e-commerce in gas and electricity utilities markets,
first introduced in the UK (pioneered by PowerGen) and Scandinavia in
1999, is showing explosive growth, reports marketing consultants Frost
& Sullivan.
Driving this accelerating pace of activity is the prospect of substantial
advantages in the shape of lower billing costs and increased service offerings.
The value of e-commerce transactions in the European utilities market
reached $36 million in 1999, Frost & Sullivan say. This looks set
to build towards a market worth $23.7 billion by the end of 2006 - a value
equal to over 9% of the total gas and electricity market.
The commercial end-user market is expected to grow from $5 million to
$5.2 billion in 2006, driven by this sector's increasing use of e-business
for procurement. The industrial market, worth $9 million, will rocket
to $10.3 billion in 2006. In both cases key benefits identified by users
include higher quality energy management tools and reduced billing costs.
These trends are also being driven by the major generating companies as
they seek to consolidate their own positions and increase their efficiencies.
Research analyst Mark Kavanagh notes that globally utilities account for
about 25% of the ‘repetitive bills’ market. "This by itself
is a clear incentive for utility companies to convert from the reliance
on paper to electronic methods. Due to the high billing costs, many utilities
will be trying to promote e-billing to obtain cost savings, which will
enable them to remain competitive," he says.
If your company regularly buys utilities (or anything else online), we’d
like to hear about your experience. Please contact elliott@i-fm.net
