Centrica : Riding the wave of a rapidly changing world

The backdrop to business today is enormously challenging. Globalisation has left many people behind and the rise of populism is challenging old assumptions and traditional centres of power.

Across the West, and especially Europe, there are competitiveness and productivity problems. Within the UK, Brexit has brought a particularly challenging level of complexity.

Meanwhile the pace of technological change - already great - is accelerating. Regulators are struggling to keep up, and too often this is holding back innovation.

Against this challenging political and economic backdrop, the energy sector is undergoing a period of profound transformation of its own.

There are three fundamental trends re-shaping the energy supply and services markets globally.

The first, triggered by the response to climate change, the energy system is becoming decentralised as new renewable and other distributed technologies are deployed. Distributed energy looks set to increase as a share of global power capacity from around 2% to perhaps as much as 12% by 2030.

Battery storage is developing rapidly and becoming more affordable. People are buying electric vehicles and seeking to integrate them into their home energy systems. Technology is also changing the customer experience through smart meters, time-of-use tariffs and new payment systems.

Secondly, as many of these technologies are now being deployed closer to the point of energy use, customers now have more choice and control over how they obtain and optimise their energy and services.

And thirdly, digitisation and technological developments are spawning increasing numbers of new propositions and solutions, accelerating these changes.

So how is Centrica evolving?

We have been shifting our emphasis and resources back towards the customer, towards propositions which will give customers more choice about how they buy energy. This will allow them to be increasingly efficient in their energy use and have the peace of mind which comes from being more in control of important aspects of their businesses and homes.

As a business, we have become simpler and have reorganised the group to face the customer. We now only have three divisions: Centrica Consumer, Centrica Business and Exploration & Production.

We are making much more innovative use of technology through digital data management and our focus is on customer segmentation, new propositions, improved service and reduced cost-to-serve. We expect our growth will come from a focus on energy supply, in-home servicing, energy marketing and trading and through Connected Home and Distributed Energy and Power.

Amid all the challenges and change we see around us, I believe that the transformation of the energy system is developing a momentum of its own. It is a momentum that Centrica can capitalise on as we pursue our strategy to deliver for the changing needs of our customers and become a truly 21st Century energy and services company.