Multi-utility
Encyclopedia
Multi-utility relates to companies offering a wide range of services and/or products. In the business market, this type of service provision
usually relates to energy
, environmental services, waste issues, infrastructure
and/or telecom services. In the consumer market, it often concerns a combined offering of services in the field of energy and digital products and services (telephony
, internet
and television
). Providers like these are also referred to as multi-service providers. So it often concerns services and products in relation to public utilities
. Multi-utility has a relation with cross-selling
, offering complementary products and services.
, multi-utility became very popular amongst power companies
in the nineties of the previous century. As a consequence of the liberalization
of the energy market, these companies were looking for opportunities to widen their product range. In addition to energy, they started to offer products and services through cable (internet, television) as well; in the business market they also became active in the fields of environment
and waste
. They considered these markets as logical complements to the traditional energy supply
. These markets had a strong association with public utilities, which led to the name multi-utility.
, the combined generation of heat
(steam) and electricity
(power). In the seventies, cogeneration expanded enormously. Large industries in particular invested in cogeneration, but smaller applications saw benefits as well. You could think of horticulture
, swimming pool
s or hospital
s. Cogeneration installations were placed at many companies, sometimes paid by the client, sometimes via a joint venture
, but also often paid for by the power company. Management and maintenance of these installations are performed by the power company. Power that is not consumed by the client, is supplied to the electricity grid. The excess steam is also used for other applications.
. In case of outsourcing, the activities and/or business units that are not considered the core business, or are considered as complementary activities, are contracted out. This phenomenon particularly occurred at ICT
departments of companies, but also administrative tasks, the contact with customers (through a call center) and facility services were often outsourced. They would preferably choose a party for whom these activities concerned were part of their core activities.
. Due to the increase in scale that has taken place in the energy sector, DELTA has explicitly chosen to further deepen their relationship with their customer
s through a combined service provision.
This service provision has various manifestation in the business market:
and Austria
. In order to stand their ground against large power companies (Eon, RWE
), these companies have developed themselves to become versatile enterprises. In addition to energy and water, these companies are also involved with the exploitation of traffic light
installations, public swimming pools. Shareholder
s are municipalities. In Norway
, Hafslund and Lyse Energi
refer to themselves as multi-utility companies.
Another example is GDF Suez
, an international industrial and service group. This company was created in 2007 and originated from France
. It is active in the field of energy, energy related services and environment. In 2008 it had a turnover of more than 80 billion Euros. In the Netherlands, the company is active in energy (under the name of Electrabel
), waste (SITA
) and industrial service provision (Cofely, called GTI until 2009).
Service provider
A service provider is an entity that provides services to other entities. Usually, this refers to a business that provides subscription or web service to other businesses or individuals. Examples of these services include Internet access, Mobile phone operators, and web application hosting...
usually relates to energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
, environmental services, waste issues, infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
and/or telecom services. In the consumer market, it often concerns a combined offering of services in the field of energy and digital products and services (telephony
Telephony
In telecommunications, telephony encompasses the general use of equipment to provide communication over distances, specifically by connecting telephones to each other....
, internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
and television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
). Providers like these are also referred to as multi-service providers. So it often concerns services and products in relation to public utilities
Public utility
A public utility is an organization that maintains the infrastructure for a public service . Public utilities are subject to forms of public control and regulation ranging from local community-based groups to state-wide government monopolies...
. Multi-utility has a relation with cross-selling
Cross-selling
Cross-selling is the action or practice of selling among or between established clients, markets, traders, etc. or the action or practice of selling an additional product or service to an existing customer. This article deals exclusively with the latter meaning. In practice, businesses define...
, offering complementary products and services.
Netherlands
In the NetherlandsNetherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, multi-utility became very popular amongst power companies
Power Company
The Power Company was a team of professional superheroes-for-hire in the DC Comics universe. The team, created by Kurt Busiek and Tom Grummett, first appeared in JLA 61,...
in the nineties of the previous century. As a consequence of the liberalization
Liberalization
In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...
of the energy market, these companies were looking for opportunities to widen their product range. In addition to energy, they started to offer products and services through cable (internet, television) as well; in the business market they also became active in the fields of environment
Environmental quality
Environmental quality is a set of properties and characteristics of the environment, either generalized or local, as they impinge on human beings and other organisms...
and waste
Waste
Waste is unwanted or useless materials. In biology, waste is any of the many unwanted substances or toxins that are expelled from living organisms, metabolic waste; such as urea, sweat or feces. Litter is waste which has been disposed of improperly...
. They considered these markets as logical complements to the traditional energy supply
Energy supply
Energy supply is the delivery of fuels or transformed fuels to point of consumption. It potentially encompasses the extraction, transmission, generation, distribution and storage of fuels...
. These markets had a strong association with public utilities, which led to the name multi-utility.
Cogeneration
In the business markets, partnerships were often created as well with (large) customers, particularly in relation to cogenerationCogeneration
Cogeneration is the use of a heat engine or a power station to simultaneously generate both electricity and useful heat....
, the combined generation of heat
Heat
In physics and thermodynamics, heat is energy transferred from one body, region, or thermodynamic system to another due to thermal contact or thermal radiation when the systems are at different temperatures. It is often described as one of the fundamental processes of energy transfer between...
(steam) and electricity
Electricity
Electricity is a general term encompassing a variety of phenomena resulting from the presence and flow of electric charge. These include many easily recognizable phenomena, such as lightning, static electricity, and the flow of electrical current in an electrical wire...
(power). In the seventies, cogeneration expanded enormously. Large industries in particular invested in cogeneration, but smaller applications saw benefits as well. You could think of horticulture
Horticulture
Horticulture is the industry and science of plant cultivation including the process of preparing soil for the planting of seeds, tubers, or cuttings. Horticulturists work and conduct research in the disciplines of plant propagation and cultivation, crop production, plant breeding and genetic...
, swimming pool
Swimming pool
A swimming pool, swimming bath, wading pool, or simply a pool, is a container filled with water intended for swimming or water-based recreation. There are many standard sizes; the largest is the Olympic-size swimming pool...
s or hospital
Hospital
A hospital is a health care institution providing patient treatment by specialized staff and equipment. Hospitals often, but not always, provide for inpatient care or longer-term patient stays....
s. Cogeneration installations were placed at many companies, sometimes paid by the client, sometimes via a joint venture
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
, but also often paid for by the power company. Management and maintenance of these installations are performed by the power company. Power that is not consumed by the client, is supplied to the electricity grid. The excess steam is also used for other applications.
Outsourcing
The management of these cogeneration installations also fitted the trend of outsourcingOutsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
. In case of outsourcing, the activities and/or business units that are not considered the core business, or are considered as complementary activities, are contracted out. This phenomenon particularly occurred at ICT
Information and communication technologies
Information and communications technology or information and communication technology, usually abbreviated as ICT, is often used as an extended synonym for information technology , but is usually a more general term that stresses the role of unified communications and the integration of...
departments of companies, but also administrative tasks, the contact with customers (through a call center) and facility services were often outsourced. They would preferably choose a party for whom these activities concerned were part of their core activities.
Current situation
By now, most of the Dutch power companies have abandoned this multi-utility strategy. They have chosen to focus on energy: mono-utility. By doing so, they are returning to their roots as it were. An exception to this is DELTA, from the Dutch province of ZeelandZeeland
Zeeland , also called Zealand in English, is the westernmost province of the Netherlands. The province, located in the south-west of the country, consists of a number of islands and a strip bordering Belgium. Its capital is Middelburg. With a population of about 380,000, its area is about...
. Due to the increase in scale that has taken place in the energy sector, DELTA has explicitly chosen to further deepen their relationship with their customer
Customer
A customer is usually used to refer to a current or potential buyer or user of the products of an individual or organization, called the supplier, seller, or vendor. This is typically through purchasing or renting goods or services...
s through a combined service provision.
This service provision has various manifestation in the business market:
| 1 Multiple products | Customer takes several products or services |
| 2 Framework agreement Framework Agreement Framework Agreement is a term that can refer to a number of international accords, including:* The Baker Plan on Western Sahara* The Agreed Framework between the United States of America and the Democratic People's Republic of Korea... |
Customer enters into a contract of several years, and buys a number of products and/or services |
| 3 Construction and management concept | Investment in and management of asset Asset In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset... s at the customer, combined with the purchase of several products and services |
| 4 Outsourcing | Taking over the utility related assets (possibly incl. the personnel involved in that) |
| 5 Full service | Taking over existing assets, infrastructure and personnel on the business site of the customer, combined with the supply of products and services |
Outside of the Netherlands
Outside of the Netherlands, there are various other multi-utility companies. The best known examples are Stadtwerke in GermanyGermany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
and Austria
Austria
Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...
. In order to stand their ground against large power companies (Eon, RWE
RWE
RWE AG , is a German electric power and natural gas public utility company based in Essen. Through its various subsidiaries, the energy company contributes electricity and gas to more than 20 million electricity customers and 10 million gas customers, principally in Europe...
), these companies have developed themselves to become versatile enterprises. In addition to energy and water, these companies are also involved with the exploitation of traffic light
Traffic light
Traffic lights, which may also be known as stoplights, traffic lamps, traffic signals, signal lights, robots or semaphore, are signalling devices positioned at road intersections, pedestrian crossings and other locations to control competing flows of traffic...
installations, public swimming pools. Shareholder
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s are municipalities. In Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
, Hafslund and Lyse Energi
Lyse Energi
Lyse is a power company based in Jæren and Ryfylke, Norway. The company operates ten hydroelectric and one thermal power plants, the power grid in 16 municipalities as well as fiberoptic broadband and other telecommunication services, natural gas distribution, district heating, burglar alarms,...
refer to themselves as multi-utility companies.
Another example is GDF Suez
GDF Suez
GDF Suez S.A. is a French multinational energy company which operates in the fields of electricity generation and distribution, natural gas and renewable energy. The world's largest utility after taking control of Britain's International Power, the company was initially formed by the merger of Gaz...
, an international industrial and service group. This company was created in 2007 and originated from France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. It is active in the field of energy, energy related services and environment. In 2008 it had a turnover of more than 80 billion Euros. In the Netherlands, the company is active in energy (under the name of Electrabel
Electrabel
Electrabel is a Belgium-based energy corporation. It is a subsidiary of GDF Suez.-History:Electrabel was established in 1905. Its actual name originates from 1990, after the regrouping of the companies Intercom, Ebes and Unerg....
), waste (SITA
Sita (waste management)
SITA is the main brand representing Suez Environnement's waste subsidiaries in Europe, North America, the Asia Pacific zone and Australia....
) and industrial service provision (Cofely, called GTI until 2009).