DEGREE PROJECT IN INDUSTRIAL ENGINEERING AND MANAGEMENT, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2017

The transformations of the major French energy players induced by the energy transition, the emergence of new actors, digitization from an organizational, structural, cultural point of view.

The transformations of major energy players accompanied by the weave consulting firm.

HÉLÈNE PAPILLAUD

KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INDUSTRIAL ENGINEERING AND MANAGEMENT Papillaud Hélène

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ABSTRACT

Today, the current energy situation is particularly difficult for major French energy players. Indeed, they have to face high energy prices - that go up and down -, have to look at renewable energies – by integrating them into their or into their distribution model - and digitize to manage their customer relations - customers’ behavior has changed and utilities have to adapt to this new behavior. They must respond to these problems while being confronted with the arrival of new entrants to the energy market: multiplication of energy players but also appearance of players in telecommunications, data….

To cope with this energy revolution, the great French utilities have no choice but to transform themselves. They must evolve technologically, digitally and also organically, structurally and culturally. The strategy of major historical energy players is therefore completely redesigned in order to give them the possibility of remaining competitive in their market and not losing their place in this revolution. They have to adapt to these new challenges and to transform themselves. Major French energy players, as ENGIE, EDF and RTE, have already started to imagine and implement new strategies to face the current energy challenges.

Operational strategy consulting firms such as Weave are there to assist them in their transformation. The consultants of Weave carry out indeed numerous missions to answer the problems of these companies. Weave is here to help these companies to evolve and transform by giving them accompaniment throughout a good overview of the current energy market and current challenges of the society. Weave helps the major French energy actors to deploy new strategies, from the design of the strategy to its implementation. Indeed, Weave has developed a recognized expertise to accompany its clients in the energy transition and respond to the challenges of development and transformation of their value chain. On the basis of innovative offers, Weave intervenes with general management and dedicated businesses.

Key words: utilities; digital; energy transition; energy revolution; transformation; consulting firm, transform

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SAMMANFATTNING

Den nuvarande situationen på energimarkanden är en utmaning för många stora franska energiaktörer. Huvudutmaningarna består idag av höga elpriser som går upp och ned på en volatil marknad, en övergång till förnyelsebara energikällor samt en nödvändig och omfattande digitalisering där särkslit kundrelationerna förändras och utvecklas. Nya aktörer från andra branscher etablerar sig på energimarknaden med nya typer av tjänster och detta innebär att befintliga aktörer måste utveckla nya affärsmodeller. Nya preferenser och beteenden hos kunderna ställer även det nya krav.

För att klara denna energirevolution, har franska etablerade energibolag inget annat val än att transformera sig. De måste utvecklas teknologiskt, digitalt men också organisatorisk, strukturellt och kulturellt. Stora historiska energiaktörer behöver därför nya strategier för att förbli konkurrenskraftiga på sina marknader och inte förlora marknadsandelar. Stora franska energiaktörer som ENGIE, EUF och RTE har redan påbörjat detta arbete och nya strategier utvecklas för att möta de aktuella utmaningarna på energiområdet.

Strategikonsultföretag som Weave finns där för att hjälpa energibranschens aktörer i denna omvandling. Weave har redan genomfört många uppdrag inom detta område och kan med sin breda kompentens och erfarenhet hjälpa dessa företag att utvecklas och förändras via en god översikt av nuvarande energimarknad och aktuella utmaningar i samhället i allmänhet. Weave kan bistå de stora franska energiaktörerna i framtagande av nya strategier inklusive genomförande. Genom långsiktigt arbete har Weave utvecklat sin expertis och är därför väl lämpade att leda sina kunder i energiomställningen och svara på de utmaningar som en utveckling och omvandling av kundernas värdekedjor innebär. . Nyckelord: Energibolag; digitalisering; energiomställning; energirevolution; omvandling; konsultföretag,

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TABLE OF CONTENTS

Abstract ...... 3 SAMMANFATTNING...... 4 Foreword ...... 7 1. CONTEXT AND PROBLEM FORMULATION ...... 9 1.1. Background: ...... 9 1.1.1. Presentation of the energy mix in ...... 9 1.1.2. Presentation of the different major energy players in France ...... 10 1.1.3. The evolution of the energy value chain in France – The history of energy market in France 12 1.1.4. Presentation of the current regulation ...... 13 1.2. Energy context and problem formulation ...... 14 1.3. Expected contribution ...... 15 1.4. Disposition ...... 15 2. METHODOLOGY ...... 17 2.1. State of the art of the current energy context and the induced transformations for major French energy actors ...... 18 2.1.1. Bibliographic researches ...... 18 2.1.2. Conference ...... 19 2.2. Analysis and Synthesis of the strategies engaged by the major French energy players 19 2.2.1. Utilities literature ...... 19 2.2.2. Interviews of people working in the major French utilities ...... 20 2.3. Collection and analysis of the various commercial proposals, studies and missions carried out by Weave with and for major French energy players ...... 20 2.3.1. Interviews of people working in Weave with and for major French energy players 20 2.3.2. Collection of commercial proposals, market studies and missions carried out for major French energy players...... 20 2.4. Planning of the study ...... 21 3. RESULTS ...... 23 3.1. Current energy challenges ...... 23 3.1.1. Energy Price ...... 23 3.1.2. Renewable Energies ...... 23 3.1.3. Digitalization ...... 25 3.2. Transformations ...... 27 3.2.1. A technological revolution ...... 27 3.2.2. A digital revolution ...... 28 3.2.3. A cultural and societal revolution ...... 28

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3.3. Strategies of major French energy players: ENGIE, EDF and RTE tHREE majors examples ...... 30 3.3.1. ENGIE ...... 30 3.3.2. EDF ...... 33 3.3.3. RTE ...... 35 3.4. The role of WEAVE, a consulting firm, in this energy revolution ...... 35 3.4.1. The role of Weave, an operational strategy consulting firm ...... 35 3.4.2. Weave’s offer...... 36 3.4.3. The commercial proposals issued by Weave for major energy players ...... 36 3.4.4. The missions carried out by Weave for major French energy players ...... 38 3.4.5. HOW CAN WE IMAGINE THE FUTURE OF LARGE UTILITIES WITH WEAVE? ...... 43 4. Conclusion ...... 45 Acknowledgements ...... 47 List of figures ...... 49 List of Tables ...... 50 References ...... 51 Interview Junel Popp (Business Technology consultant in Weave)...... 55 Extract from WEAVE’s references in the energy sector ...... 57 The Weave Competence Center - Energies & Environnement ...... 59

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FOREWORD

The council is a tertiary sector activity. It is based on a simple principle: an outside firm assists a client company in certain aspects where it considers that it could benefit from an external contribution. This usually happens in the form of a call for tenders carried out by a company to which the consulting firms respond. Consulting firms can also offer offers to certain client companies when they already know the context of the company or some of its members. The consulting firm where I completed my final project is an operational strategy consulting firm. The firm supports its clients, in France and internationally, from the upstream phases of projects to implementation steering by putting speed and agility at the service of a sustainable transformation of companies.

The following report is the result of several months of work in the “Industry, Energy and Services” department / entity of the consulting company Weave. Created in 2001 in Paris, weave now employs 280 consultants divided in the following different business units: “Industry, Energy and Services”, “Business Technology”, “Bank and Insurance”, “. The “Industry, Energy and Services” team and the “Business Technology” team work with companies involved in renewable energies, oil & gas, power, water, energy management, tertiary and nuclear industries. The missions realized are various new market approaches, establishing positioning on new issues (IoT, digital economy, blockchain…).

I conducted this project during my internship in Weave. The main objective of this project is to give a clear picture of the current energy context in France and to discuss the various developments that directly impact the major French energy actors, thus forcing them to transform themselves, and explain the role of consulting firms, Weave in particular, in accompanying these transformations.

NB- Due to confidentiality issues toward the WEAVE Company, some data will not be communicated in this report.

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1. CONTEXT AND PROBLEM FORMULATION

This chapter introduces the energy sector in France, its organization and the current situation of this sector, which leads to important challenges for major French energy players.

1.1. BACKGROUND:

1.1.1. PRESENTATION OF THE ENERGY MIX IN FRANCE

The energy sector in France includes French local production (52%) and imports (48%) of primary energy, their transformation into secondary energy and transport and distribution of energy to the final consumer.

In 2014, the primary energy consumption is distributed as follows (Énergie en France, 2017).

- 47.5% of fossil fuels (30.1% of petroleum products, 14% of natural gas, 3.4% of coal) - 42.4% of primary non-renewable (nuclear) - 9.6% of renewable energies - 0.4% of non-renewable urban waste

Energy mix in France in 2014

0,40%

9,60% Fossils fuels

Nuclear 47,50% Renewable energies 42,40% Non-renewable urban waste

FIGURE 1 : ENERGY MIX IN FRANCE IN 2014 (ENERGIE EN FRANCE, 2017)

The French energy mix is specific. Indeed, electricity occupies a prominent place. Many French homes prefer this energy to heat themselves, contrary to the majority of European countries that favor natural gas. The production of electricity in France is provided by various means of production (Les spécificités du mix énergétique français, 2017): - -fired thermal power plants (natural gas, oil or coal) - stations - The means of production using renewable energies (solar, wind, geothermal, biomass, hydropower)

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The share of nuclear energy in the French electric power mix is very high: it represents almost 75%. The RTE1 website allows having the distribution of the French electrical energy mix in real time (Eco2mix Mix énergetique, 2017).

Electricity mix in France (19/02/2017)

5% Nuclear 2% 1% 11% Solar 2% Wind 5% Bioenergy Coal 74% Natural gas Hydraulic

FIGURE 2 : ELECTRICITY MIX IN FRANCE FEBRUARY 19, 2017 (ECO2MIX MIX ÉNERGETIQUE, 2017)

1.1.2. PRESENTATION OF THE DIFFERENT MAJOR ENERGY PLAYERS IN FRANCE

In France, in the traditional organization of the energy market, it is possible to divide the different players in 4 categories: The producers, the transport networks, the distribution networks and the suppliers (Energie-info.fr, 2017).

THE PRODUCERS The producers are subject to competition in the French energy market. They take action from generating stations to the transmission system. They produce electricity with nuclear, thermal, hydro, wind, solar panels. Electricity is not stored; installations must be able to produce the necessary quantities at the request of consumers. They produce gas from on shore or off shore deposits, mainly imported into France (from Norway, Algeria, Russia). Gas can be stored.

In 2015, electricity generated in France comes from nuclear power (76%), hydropower (11%), thermal, wind and photovoltaics (Klein, 2017).

In 2015, almost all gas consumed in France is imported from Norway (36%), Russia (18%), the Netherlands (14%) and Algeria (11%) (Klein, 2017).

The producers sell "wholesale", to suppliers, the electricity or the gas they produced.

In France, the main electricity producers are EDF2, ENGIE3 and E.ON4. EDF is the leading producer of electricity in France and in the world. ENGIE is the second largest producer of electricity in

1 RTE (electricity transmission network) is a subsidiary of the EDF group and is the sole operator of the French public electricity transmission network. RTE guarantees the transmission of electricity between producers and distributors or industrialists directly connected to the transmission network. RTE is supplying electricity at high and very high voltage upstream of the base-voltage distribution mainly operated by ErDF (Electricité Réseau Distribution France) for final consumers.

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France (Engie.fr, 2017). ENGIE has a generating fleet diversified more than 10,000 MW installed in France. ENGIE is a leader in production and more than 50% of its energy mix is composed of renewable energy (Engie.fr, 2017). E.ON, a German-based company, gained a foothold in the energy market at the time of opening up to competition. These three main players account for more than 95% of electricity production in France (Comparateur.selectra.info, 2017)

For its natural gas needs, France depends on almost 100% of imports from abroad. One of the only national resources was located under the commune of Lacq, in the Pyrénées-Atlantiques, and was exploited by Total until its exhaustion in 2013. Since then, some former coal mines remain exploited for their coal gas, but the contribution to national consumption is marginal.

Natural gas producers are thus largely multinational companies engaged in the exploration of new deposits abroad, from the extraction of gas and its transport to the French border. Among the main ones, we can mention E.ON, RUHRGAZ, ENI (which also runs a supply business on our territory), Russian GAZPROM and of course French TOTAL (Brandini, 2017).

THE TRANSPORT NETWORKS The transport networks are regulated activities. They represent the transport of energy throughout the country. The transmission of energy takes place from production sites to places of consumption by lines with very high voltage in electricity or gas pipelines. Concerning the electricity transportation, RTE is in charge of transport. Concerning the gas transportation, GRTgaz and TIGF provide transport.

THE DISTRIBUTION NETWORKS The distribution networks are regulated activities. They represent the distribution of energy to municipalities and dwellings. They allow to carry the energy between several communes or several houses. Local authorities are owners and can delegate the management of their network to ERDF (electricity) or GDF (natural gas) or entrust the management to a local distribution company (ELD manage 5% of the energy consumed in France). Their mission is to guarantee quality and continuity of energy to consumers, provide troubleshooting services (electrical and gas) and perform technical services (maintenance, meter reading).

THE SUPPLIERS The suppliers are submitted to competition. They are in charge of selling energy to end users. The supplier markets the energy it produces or purchases and injects into the transmission system. Each consumer contracts with the supplier (invoice, additional services, customer service for daily advice).Since the opening of the market, the consumer chooses his supplier.

2 EDF, France's electricity company, is the leading producer and supplier of electricity in France and in the world. 3 ENGIE, formerly GDF Suez, is a French energy group. It is the third largest energy group in the world by 2015. 4 E.ON is the result of the merger of the German energy groups Veba and Viag. E.ON is the third largest electric power company in Europe.

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In France, since the opening of the market in 2000, the consumer can choose between several energy suppliers (Liste des fournisseurs d'électricité en France, 2017). These energy suppliers are presented in the figure below :

FIGURE 3 : MAJOR FRENCH ENERGY SUPPLIERS (LISTE DES FOURNISSEURS D'ELECTRICITE EN FRANCE, 2017)

1.1.3. THE EVOLUTION OF THE ENERGY VALUE CHAIN IN FRANCE – THE HISTORY OF ENERGY MARKET IN FRANCE

The energy market in France has gradually begun to open up since the early 2000s, both for electricity and natural gas, after a total opening to competition since 1 July 2007. Since that date, every consumer has the possibility to freely choose the energy supplier of his choice and opt for a market offer. Production and marketing activities are now "deregulated", that is to say, open to competition (Energie- info.fr, 2017).

The liberalization of the in France is reflected in freedom of supplier choice for consumers (since 2004 for professionals), freedom of establishment for producers (since 2007), the right of access under objective, transparent and non-discriminatory conditions for all users of the transmission and distribution networks (since 2007), the supply by EDF of nuclear electricity to other suppliers and the end of regulated sales tariffs: Energy suppliers have so far offered regulated sales tariffs to professional consumers. These regulated tariffs have been phased out (maturing on 1 January 2016) (Entreprises.cci- paris-idf.fr, 2017).

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Thus, before the year 2000, the energy market was a regulated market, with a single contract for gas and electricity and a single distributor and supplier (Studen.fr, 2017).

User Production Transport Distribution A single contract

FIGURE 4 : ENERGY VALUE CHAIN - THE REGULATED MARKET

Since the 2000s, the energy market has opened up to competition, enabling professionals and consumers to choose from several suppliers and several contracts (Studen.fr, 2017).

Operators European Producers (Transport / suppliers Customers Distribution)

FIGURE 5 : ENERGY VALUE CHAIN - THE DEREGULATED MARKET

1.1.4. PRESENTATION OF THE CURRENT REGULATION

The regulatory framework related to energy in France is not negligible. The energy transition aims to prepare for the post-oil period and to establish a robust and sustainable energy model in the face of energy supply challenges, price developments, resource depletion and the need to protect the environment.

To provide a framework for the joint action of citizens, businesses, territories and the state, an energy transition law for green growth was put in place in 2015 in France. This law makes it possible to contribute more effectively to the fight against climate change and the preservation of the environment. It also aims to strengthen French energy independence while offering businesses and citizens access to energy at a competitive cost (Loi de transition énergétique pour la croissance verte, 2017).

This law sets medium- and long-term objectives:

- Reducing of greenhouse gases by 40% between 1990 and 2030. - reducing energy consumption by 50% in 2050 compared to 2012 by targeting an intermediate target of 20% in 2030 - the reduction of the primary energy consumption of fossil fuels by 30% in 2030 compared to 2012 - increasing the share of renewable energies by 23% of gross final energy consumption in 2020 - the reduction of the share of nuclear power in electricity generation to 50% by 2025

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The key measures of this law are therefore: the renovation of the existing building stock, improving the energy and environmental performance of new buildings, the development of clean transport, the fight against waste and the promotion of the circular economy, the development of renewable energies, strengthening nuclear safety, the fight against energy poverty.

The Paris Agreement ushers in a new inclusive approach to climate action. The ambition of the Paris Agreement is threefold, aligning the economy, development and climate (Edenhofer, Madruga and Sokona, 2017).

- The agreement calls upon all countries of the world to contribute, at their scale, to reducing greenhouse gas emissions to limit the rise in global temperature well below 2 ° C and, if possible, 1.5 ° C, here at the end of the century. - This implies a drastic reduction of global greenhouse gases by 2100. Global emissions must be reduced by 40% to 70% by 2050 in order to achieve the climate change target. The has decided to reduce its greenhouse gas emissions by 35% (compared to 1990 levels) by 2030 with the objective of reducing them by 40%. Developing countries have not set targets for reducing greenhouse gas emissions because they wish to continue to develop economically; it is therefore difficult to set a precise objective. - Organizes principles of solidarity by asking developed countries for funding to help the poorest countries to reduce their emissions but also to adapt to the consequences of the climate change to which they are very vulnerable. It also stipulates that developing countries that have the opportunity are invited to participate in the funding. The European Union and the United States have decided to allocate 1.5% of their GDP to the climate fund.

1.2. ENERGY CONTEXT AND PROBLEM FORMULATION

Currently the energy sector is undergoing real changes. The major energy players are confronted with various major problems that force them to reinvent themselves: digital entry, the need to develop renewable energies (increasingly competitive and neutral in carbon emissions), the new place of the consumer, and the emergence of new players throughout the energy chain.

The energy sector is thus undergoing a profound transformation. The major French energy players have to rethink and reinvent their business model in order to cope with the energy transition and to remain competitive in the market. Their business model should be reconsidered to move from a centralized model to a collaborative model for innovation and open-plan interactions. This profound and accelerated change in energy production systems and patterns of consumption suggest several future challenges that are difficult to predict. Large groups must consider all possible futures in order to give themselves the strategic agility necessary for their success. The energy market must adopt a cross-market strategy with an ecosystem incorporating all stakeholders.

The major French energy players must reinvent themselves to face these unprecedented energy transformations.

What changes must be made to remain competitive in the energy market? How can incumbents defend against new entrants and changed value chains? What is the role of consultants in the energy market transformation?

To answer these questions, the major French energy players must make a great number of changes from a technical, operational, organizational and cultural point of view and consulting companies are here to help them to anticipate these transformations and accompany them in this transformation.

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1.3. EXPECTED CONTRIBUTION

The purpose of this study is to provide information on the transformations undertaken by the major French utilities to deal with the current energy revolution. First we will present the current context of energy transition. We will then explain the transformations induced by this changing energy context. Examples of major utilities strategies will be presented. Finally we will explain the role of consulting forms in this context of energy revolution with regard to major energy players.

1.4. DISPOSITION

This study follows the distribution below:

1- Context and Problem formulation – This chapter presents the energy context in France and introduces the key issues concerning the current energy sector transformation.

2- Methodology – This section underlines the objectives of the study and the methodoly used to reach the results of the study. The study has been conducted has been conducted in several steps: a literature rewiew with multiple type of sources combined with the objective to realize a state of the art of the current energy context and the induced transformations, an analysis and a synthesis of the strategies engaged by the major French energy players with interview of people working in the great French utilities combined with utilities literature (websites, commercial brochures, …) and a collection of interviews of people working within the consulting firm weave to know the positioning of the consulting in this context of energy revolution and the way in which Weave intervenes.

3- Results – The results section is organized in four main parts described below.

1. Current energy challenges – This section provides an overview of the current context of the world of energy and of the challenges for the major French energy players. 2. Transformations induced by these challenges – This part analyses the challenges faced by large utilities and explains the transformations that result from them. 3. Strategies initiated by the major French energy players: ENGIE, EDF and RTE, three majors examples – This section takes the example of three major French energy players (ENGIE, EDF and RTE and describes their strategy deployed to face this energy revolution that impacts them considerably. 4. The role of Weave, a consulting firm, in this energy revolution - This part introduces the link between the consulting firm in which I worked and the major French energy players. Indeed, the consulting firm Weave accompanies major energy players in their reorganization induced by the current energy revolution. 4- Conclusion – This part concludes on the work presented and also enlightens knowledge gathered during the master thesis realization at weave.

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2. METHODOLOGY

This section underlines the objectives of the study and the methodology used to reach them. This section discusses the validity and the reliability of the study. The study has been conducted in three different steps : a literature review with multiple type of sources combined with the objective to realize a state of the art of the current energy context and the induced transformations for major French energy actors, an analysis and a synthesis of the strategies engaged by the major French energy players with interview of people working in the major French utilities combined with utilities literature (websites, commercial brochures, …) and a collection of interviews of people working within the consulting firm weave to know the positioning of the consulting in this context of energy revolution and the way in which Weave intervenes.

The study has followed three main steps with dedicated goals and means for each of them as we can see in the figure 6 below:

FIGURE 6 : METHODOLOGY OF THE STUDY – OBJECTIVES AND MEANS IMPLEMENTED

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2.1. STATE OF THE ART OF THE CURRENT ENERGY CONTEXT AND THE INDUCED TRANSFORMATIONS FOR MAJOR FRENCH ENERGY ACTORS

2.1.1. BIBLIOGRAPHIC RESEARCHES

The bibliographic researches aimed to understand the current energy context and the main transformations induced. To reach this objective, sources from diverse nature have been used: academic supports, specialized media, scientific publications – SCIENCE DIRECT, TECHNIQUES DE L’INGENIEUR, PhD works, newspaper, and publications from public institutional organisms, websites or conferences.

The main sources are listed and classified below:

Academic supports Courses of KTH university (Strategies in the Global Climate Agenda, Transformations in Energy Systems and Industries)

Media Enerpress, La Tribune, Les Echos, Petit Web, L’Usine digitale, l’Usine nouvelle

Scientific publications Relevant publications on the energy sector and the energy transformation on the SCIENCE DIRECT database

Scientific Books

Institutional publications France: Ademe5, Ministère de l’environnement

Website and documentation ENGIE, EDF, RTE of major energy players

Consulting companies CapGemini consulting, Bearing Point, Sia Partners publications

TABLE 1: MAIN SOURCES OF THE STUDY

5 ADEME – National Agency for the Environment and the Energy Control, France

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2.1.2. CONFERENCE

In order to enrich my sources, I attended various conferences on the energy context and induced transformations. The speakers were, for the most part, energy players or new entrants to the energy market. So they were all directly affected by the current energy revolution.

The main conferences I have attended are listed below:

Date Subject Speakers Energy transition on a - Colette Lewiner, Energy and Utilities background of low prices and 28/11/2016 Advisor to the President of Capgemini digital revolution: How do our utilities adapt? - Jalil Chikhi, Google France Director IT, Energy : Who will draw the 12/12/2016 world of tomorrow ? - Mathias Forget, Google France Industry Manager How does RTE face a changing - François Brottes, Chairman of the world and the electrical 16/01/2017 Management Board of RTE challenges of today and tomorrow? - Jérôme Perrin, Scientific Director at Renault - Erwan Boumard, Managing Director of Shared Energy Transformations of the energy 17/01/2017 sector : new actors and services - Stéphane Labranche, Sociologist of Energy and Climate - Mark Akehurst, Innovation Program Director, ENGIE - François Bélorgey, director of the Institute for Economic and Social Research on Telecommunications (IREST) New models of energy marketing - Hervé Rannou, CEO of ITEMS 6/02/2017 modes International and Cityzen Data - Jean-Laurent Schaub, CEO of Ween, Laureate 2016 at CES Las Vegas with his thermostat connected TABLE 2 : CONFERENCES ATTENDED

2.2. ANALYSIS AND SYNTHESIS OF THE STRATEGIES ENGAGED BY THE MAJOR FRENCH ENERGY PLAYERS

2.2.1. UTILITIES LITERATURE

In order to know the strategies undertaken by the major energy players, commercial brochures and internal documents of these major groups were used. Indeed, the great French utilities communicate much about their updating of strategic plans with regard to this energy revolution in order to show that they are ready to face this revolution and that they are prepared for the various transformations to which they are confronted. In addition, the contacts I had with the people working in these large companies also provided me with documentation on this. The documentation provided by companies to communicate their strategy cannot be completely objective. Indeed, the objective of these companies through these presentations is to attract customers and to appear as a connected, digital company, in the era of time. Nevertheless, these presentations still include real measures implemented. Coupled with testimonials from collaborators and press articles describing the strategies of these companies, these documents provided can be read with a neutral eye.

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2.2.2. INTERVIEWS OF PEOPLE WORKING IN THE MAJOR FRENCH UTILITIES

In order to complete the information gathered on their website and documentations, 8 interviews have been conducted with people working in the major French utilities. Their knowledge and feedbacks were precious to truly understand the situation and the strategies of the major French energy players. However, it is not possible to transcribe these interviews exactly for reasons of confidentiality.

The employees contacted come mainly from the two main French energy players: ENGIE and EDF. These collaborators all had different functions in order to obtain global views on the strategies and measures of the companies concerned. Through these testimonials, they were able to provide their individual vision of the strategy borrowed by their company and the changes induced in their own trade.

Different questions were posed to these actors of major French energy groups:

- What mutations / transformations are you facing in your work? - Do you feel them in your daily life? - Do you feel them in your company? - Do you feel threatened in this context of energy transformation? - How do you see the future of your business?

2.3. COLLECTION AND ANALYSIS OF THE VARIOUS COMMERCIAL PROPOSALS, STUDIES AND MISSIONS CARRIED OUT BY WEAVE WITH AND FOR MAJOR FRENCH ENERGY PLAYERS

2.3.1. INTERVIEWS OF PEOPLE WORKING IN WEAVE WITH AND FOR MAJOR FRENCH ENERGY PLAYERS

Within the operational strategy consulting firm weave in which I did my final degree project, some interviews were conducted with the aim of knowing the various missions that have been carried out or are currently carried out to accompany the major French energy players in this energy revolution.

The people interviewed within the consulting company Weave are people who work directly with the major French energy players. During the interviews they were able to explain the principle and the approach of their mission with these major French energy players, their role within their mission and the current context of the actors with whom they work. These people made it possible to bring an external view on the situation of the major French players.

2.3.2. COLLECTION OF COMMERCIAL PROPOSALS, MARKET STUDIES AND MISSIONS CARRIED OUT FOR MAJOR FRENCH ENERGY PLAYERS.

In order to have a precise and clear idea of the consulting missions carried out for the major French energy players, numerous mission reports, scoping notes, project progress monitoring ... were collected and analyzed. Most of these documents are confidential and cannot be included in this report. Although most documents are confidential, it is nevertheless possible to explain what has been accomplished within each mission by keeping quiet the name of the energy actors.

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2.4. PLANNING OF THE STUDY

First of all, a state of the art of the energy sector and of the French energy context has been realized. An analysis of the transformations induced by this unstable context has then been conducted. Several testimonies of actors of the major energy groups were collected in order to have a vision of actors directly involved in these energy transformations.

A more detailed analysis of what is being done in the consulting sector and more precisely at Weave to accompany this energy transformation has been achieved. Various people working or having worked at Weave with major French energy players were interviewed. These people work with these major energy players to help them transform their strategy, accompany them in a new project, in their cultural, managerial, organizational or strategic transformation.

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3. RESULTS

3.1. CURRENT ENERGY CHALLENGES

As we said earlier, the current energy context is particularly difficult for the major energy players: they are highly exposed to gas, electricity and oil prices, their models become obsolete, which has a not inconsiderable impact on the value of their assets and their results (Wainstein and Bumpus, 2016).

Regulatory and technological changes are putting energy providers at an unprecedented competitive and strategic paradigm (Groupe Xerfi - Le médiateur du monde économique, 2016).

The successive regulatory packages adopted in the field of energy in France have introduced more competition on the upstream and downstream of the energy value chain. Technological revolutions (smart grids, digital revolution, etc) are transforming the uses and professions of energy companies. All in a context of strong uncertainties on energy prices (Groupe Xerfi - Le médiateur du monde économique, 2016). The question for the major French energy utilities is therefore to know which activities will be the most generating value tomorrow to position.

3.1.1. ENERGY PRICE

At the end of 2015 and at the beginning of 2016, oil prices decreased. Indeed, the Saudi policy of protecting its market share combined with slower developing countries growth, resulted in low oil prices. Hopes on an OPEC agreement to freeze production have then led to a price rebound. Coal and gas prices followed the same trend. With low electricity and gas wholesale prices, the utilities’ financial situation is becoming critical. While wholesale prices decreased, retail prices keep increasing. Incoherent Energy- Climate policies have led to a chaotic situation; the absence of coordination within the EU has led to an unsettled wholesale market not delivering the right long term signals and increasing prices for the end customer. Moreover, as a consequence of the low carbon price, coal plants are more used than gas plants (Capgemini, 2016).

In 2015 the EU decided that in 2019 it would implement a Market Stability Reserve mechanism in order to regulate the Energy Union Allowance price. This announcement did not lead to a price increase and in August 2016 prices stayed at an extremely low 5 €/t (Capgemini, 2016).

3.1.2. RENEWABLE ENERGIES

The world of energy is experiencing a real transformation. The energy transition is the transition from the current energy system, using non-renewable energy resources, to a new energy mix based on renewable resources. This involves the development of alternatives to fossil fuels. The energy production structure is thus disrupted by the advent of renewable energies, which leads to change throughout the value chain (Long and LLP, 2017).

There is a deployment of renewable energies. This is due to the many constraints on reducing greenhouse gases imposed by the Paris agreement (Lhioreau, 2010).

In this context, energy companies are obliged to develop a new efficient energy mix, in particular by selling non-strategic assets to regain investment margins and redeploy on green energy (X-sursaut.org, 2017). There are two good reasons to support the development of renewable energy: first, the world must significantly cut its CO2 emissions; second, it has to be prepared for a future in which fossils fuels will be exhausted, or at least scarce and thus more expensive. Reducing emissions is now an absolute necessity and all regulations have to be implemented: renewable energy, but also nuclear power, energy efficiency, CCS and a high carbon price (Capgemini, 2016).

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The arrival of renewable energies in the energy mix puts other forms of energy towards too low operating rates. Today many gas or coal-fired power plants are no longer profitable because of the significant development of renewable energies. These fossil fuel power plants are therefore closed by the utilities. Indeed, numerous gas fired plants have already closed and more is expected. However, this can pose a problem of security of supply since renewable energies are intermittent sources of energy. In case of very cold winters, security of supply could be threatened (Capgemini, 2016). With the current solutions of energy storage, these renewable energies do not make it possible to ensure the peaks. The issue of energy storage is therefore very important. From this point of view, gas may remain necessary to ensure the necessary flexibility for electrical systems. Indeed, the power generation of gas-fired power plants is easier to control than renewable or nuclear production.

Renewable energies are now becoming competitive. Their price is falling and storage solutions are developing to deal with the storage problems of these intermittent energies. According to Bloomberg Energy Outlook 2016, in Europe, onshore wind and solar utility scale PV became cheaper in Europe in 2015 while coal and gas-fired plants increased due to assumptions including lower utilization rates and slightly higher carbon pries. The largest European solar farm built by Neoen near Bordeaux (300 MW capacity) is a good illustration of the falling PV prices. Its electricity will be sold at 105 €/MWh, a lower price than the estimated one of new nuclear plants (e.g. 110 €/MWh for the two new nuclear reactors Hinkley Point C). This figure is still above the market electricity price but shows the global shift in competitiveness. The decreasing cost trend for renewable energy will continue. Indeed, according to Bloomberg Energy Outlook 2016, new utility-scale solar PV LCOE is expected to drop down 60% from a $74-$220/MWh range today, to a central estimate of around $40/MWh. Offshore wind is still quite expensive compared to other green technologies but the trend is also in the decreasing direction. In June 2016, the CEOs of 10 major wind actors committed to lower offshore LCOE to €80/MWh by 2025.

As we introduced before, the advent of renewable energies causes a major upheaval in the structure of energy production. Indeed, this brings about major changes throughout the energy value chain. It is the transition from the traditional centralized system of vertically integrated monopolies to a decentralized collaborative system. It is possible for the passive consumer to become a prosumer, meaning that he is both consumer and producer. The decentralization of the energy is one of the most important innovations that cause energy landscape to change. Indeed, with the introduction of renewable energy in the energy mix, energy becomes accessible to everyone. Nowadays, more and more consumers become “prosumers”; the energy is produced closer to where it is consumed than before. By enabling local actions and empowering individuals and communities as producers, decentralization enhances a massive cultural change in people attitude to and use of energy. This represents a big change for utilities. Indeed, in the traditional value chain, the model was very centralized and very predictable. The predictions were therefore not very difficult to realize; it was easy to know what was going to tell the utilities what they invested. With these new, highly decentralized models, it is impossible to predict exactly what will happen, renewable energies are intermittent energies for which it is currently very difficult to make forecasts (Smartgrids-cre.fr, 2017).

The energy model thus becomes a much more diffuse model in which everyone can have much easier access to energy. Moreover, thanks to digital, energy information becomes accessible to all consumers, enabling them to take on this role of energy actor.

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3.1.3. DIGITALIZATION

Digital has always existed in the field of energy. Thousands of sensors have long enabled energy companies to capture information and access this technical information. However, we are talking about a digital revolution. As we said previously, information becomes accessible to everyone and everything becomes possible. The digital allows much more things than before.

Indeed, digital has already redistributed the maps of competitive dynamics in many sectors. As can be seen in the figure below, the equilibriums are already disrupted by the digital sector in certain sectors (cybercommerce, hotel industry, transport) and other new actors are beginning to fit into part of the value chain (transport, banking, insurance).

FIGURE 7 : THE REDISTRIBUTION OF COMPETITIVE CARDS IN SOME SECTORS

3 disruptive technologies are at the origin of the digital enterprise: Mobility (ability to provide mobile services to consumers and employees), Big Data (ability to handle large volumes of data) and Internet of Things (ability to interconnect people and objects). The digital enterprise leverages these technologies to generate additional revenue and minimize operating costs and working capital requirements (Ces acteurs qui réinventent le secteur de l’énergie en Europe… pour quelle valeur ? | Article de blog Capgemini, 2017).

The energy revolution is part of a wider dynamic. The energy revolution results from the convergence between the new technologies of production of renewable energies and the new technologies of communication and information.

The digital economy is an environment conductive to the multiplication of actors. The energy value chain is thus invaded by start-ups and other new actors of energy. The digital world is an environment conductive to the dissociation of traditional boundaries between sectors of activity. Indeed, numerous new entrants are taking a share of the cake, highlighting the need for established players to accelerate their transformation. As incumbents gradually start to act on and accelerate the market transformation taking shape around them, newcomers are claiming their place in the changing value chain. Electric transportation, peer-to-peer supply, flexibility, and smart homes and buildings are examples of new markets, with revenue potential now tangible and substantial enough to attract more and larger players. Pioneers and trendsetters have now grown into substantial players (for example, First Utility, founded in 2008, has become the largest energy supplier in the UK outside the big six), and deep- pocketed new entrants such as Tesla are expanding their footprint in the value chain, as demonstrated by Tesla’s move in June 2016 to acquire SolarCity. Established companies from various sectors (such as insurance, telecoms, electric equipment, internet service provision) are playing an increasing role in the energy business. For example, Apple and Google have already established positions in the downstream

25 Papillaud Hélène market; it will only be a matter of time before they add the commodity supply of energy to their service and technology offerings. A new type of integrated energy provider is taking shape (Rebière, 2017).

New entrants are moving into energy and giants are reinventing themselves through technologies:

- Google : redefining energy services through digital appliances and platforms - Tesla : changing the mobility and home energy paradigms through electric mobility and storage

Technology startups are a driving force in changing the energy landscape. For example, demand response startups such as Endeco, KiWi Power, Open Energi, and Flexitricity are developing new propositions; the smart home market is a key target area for these new companies. Startups and players from other sectors (such as technology giants) continue to launch solutions that take advantage of Internet of Things (IoT) technology, bringing a multitude of new home automation products to the market. For example, ecobee and Rachio enable efficient consumption of, respectively, electricity and water by using sensors, monitoring technology, and data. They have received funding from corporations and corporate venture capital firms, such as Carrier Corporation, which backed Ecobee, and Amazon’s Alexa Fund, which backed Rachio71. These major trends across the energy and Utility sector mean that companies have to transform themselves radically in all dimensions (Energie Point - Chroniques d'une révolution annoncée, 2017).

Most players in the value chain are pursuing an ambitious digital strategy:

- First of all, historical players (ENGIE, Vinci, Schneider…) support strong acquisition strategies, partnerships and Open Innovation (Engie - Platform C3 Energy, Blu.e ...). As we can see in the figure below, they are positioned at key locations in the energy value chain and have historical expertise on these links in the chain. - The digital giants want to manage the data relating to the building, the equipment and their uses, in a totally transverse vision. - GAFAS is looking to re-enter the Smart Home and Smart City markets, initially with B2C- oriented positioning. As we can see in the figure below, Google is positioning itself in the supply of equipment by developing innovative subsidiaries: Nest, the new subsidiary of Google which has developed the connected thermostat for instance.

FIGURE 8 : MOVEMENTS WITHIN THE VALUE CHAIN

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Strategic choices, investments and takeovers by incumbents such as ENGIE and Total show that established players have abandoned their wait-and-see stance and are facing up to the next level of competition.

3.2. TRANSFORMATIONS

The energy market is changing rapidly. Large groups must thus seize the opportunities offered by technological developments (new renewable sources of production, deployment of IoT, structuring of smart grids), coping with the changing nature of demand (the consumer becomes more responsible and conscious of Its consumption and thus wishes to become a player) and adapt to national and international objectives (greenhouse gas emissions targets, renewable energy production, energy efficiency, etc.).

This major break in the world of energy is a triple revolution6:

- Technological revolution: emergence of renewable energies, storage of energy - Digital revolution: in all services and products offered - Cultural and societal revolution: the relationship with the customer is radically transformed

Nevertheless, this energy revolution is fundamentally positive. Indeed, for large energy utilities, it is a source of growth and new opportunities: the consumer becomes a player thanks to digital and has a greater environmental consciousness, new means of production are developing and innovation is at the heart of this revolution.

3.2.1. A TECHNOLOGICAL REVOLUTION

The energy revolution is a technological revolution. The development of renewable energies also implies an important change in the energy distribution systems. With renewable energies, many connections are needed. Major energy players are developing more and more smart solutions to optimize energy management. Many smart meters are installed on the energy networks and it is necessary for energy distributors to become data managers in order to process and analyze the data collected by intelligent sensors (Connaissance des Énergies, 2017).

It is now necessary for energy networks to become smarter: energy networks must be more flexible, more scalable and equipped with intelligent functions. Indeed, the development of intermittent renewable energies requires regulation on the networks. Energy networks have to acquire intelligent sensors and analyze as much data as possible in order to balance a variable consumption with variable production as much as possible. For this it is also necessary to make the consumer more intelligent. The consumer has the possibility to control his energy consumption. Smart grids are power grids that can intelligently integrate the behavior and actions of all users connected to them - producers and consumers and those who exert both activities - in order to efficiently forge electricity. Smart Grids allow for better management of the link between production and electricity consumption by integrating intermittent renewable energies.They can create more intelligence on power grids. They allow a certain degree of flexibility which makes it possible to adapt production and consumption in real time. They also make it possible to manage the increasing and variable uses of electricity and to integrate the arrival of renewable energies on the network. Currently they are emerging as a lever in response to the major challenges of the electric power sector. Indeed, they make it possible to maintain and develop the network at controlled costs since they have the capacity to respond to the increase in demand and promise reliability of supply. They also reduce energy intensity and CO2 emissions thanks to a promise of energy efficiency throughout the value chain and a capacity to welcome renewable energies (La Tribune, 2017).

Previously the exchanges of electrical energy are made on centralized networks and are piloted with large mesh. Production is centralized, unidirectional, the consumer is passive. The balance of the electrical

6 According to Isabelle Kocher-Gérard Mestrallet, New CEO of the ENGIE group

27 Papillaud Hélène system is managed by supply and production. The model evolves towards exchanges of electric energy controlled in real time, optimized at different scales and involving new players in the equilibria. Production becomes decentralized, digital, the consumer becomes consuming actor. The balance of the electrical system is managed by demand and consumption (Mah, 2016).

The deployment of smart grids to network users would lead to two major changes: an evolution of mentalities and the development of digital technologies.

3.2.2. A DIGITAL REVOLUTION

The energy revolution goes hand in hand with the digital revolution. Digital is therefore a key performance driver for major energy players (Ces acteurs qui réinventent le secteur de l’énergie en Europe… pour quelle valeur ? | Article de blog Capgemini, 2017). All major French energy players must reinvent themselves to meet the new challenges of digitalization and data exploitation. They have to adapt (be more agile) and digitize preparing for the entry of new players. Digital is a lever of performance and growth for traditional utilities. The digital will notably allow the utilities to create a new customer relationship which will allow them to offer their customers services and offers more adapted to their needs.

Having become used to more advanced customer experiences in other sectors, such as retail or telecommunications, consumers now expect new and higher standards in their relationships with energy suppliers. Today customers are more demanding in reducing greenhouse gases and paying more attention to their environmental footprint. Digital technology allows customers to control and reduce their energy consumption. For instance via offers and web services offered by large utilities.

In this dual context of managing energy transition while improving profitability, it is imperative that utilities engage completely and quickly in implementing their digital transformation. But the appearance of digital technologies implies new investments.

3.2.3. A CULTURAL AND SOCIETAL REVOLUTION

The energy revolution is also a societal and cultural revolution.

Energy transformation is a real human adventure. Indeed, this transformation has an impact on the culture of large groups, management and organization. To adapt to this new framework, utilities review their hierarchical structures. New entities are created, the old ones are reorganized. This also causes a cultural shift within these big companies (Petit Web - Le décodeur du numérique, 2017).

The major energy players are restructuring. The hierarchical structures are upset. New entities are created, the former entities are reorganized. Large utilities must reorganize themselves to cope with the energy transition. They must propose disruptive and innovative solutions in their organizational models. Hierarchical structures represent a barrier to innovation. It is therefore necessary for major French energy players to simplify their organizations and their modes of operation. This transformation is essential to retain customers in a context of increased competition. The major French energy players must become more agile. The restructuration is therefore necessary and essential to stay competitive in the global market. They must be able to adapt to fluctuations in the environment and respond quickly to changes in the market.

Indeed, the current business context centered on data and energy transition is creating a need for new competencies in energy and Utilities companies, which responding by implementing new roles: Businesses are becoming data-centric. Companies need new capabilities (such as data analytics, data management and cybersecurity) and new roles within their organizations. In 2015, Chief Digital Officer Positions were

28 Papillaud Hélène widely created at Enedis, Enel Green Power, Enel, GE, Total, ENGIE and elsewhere. All these posts are supported by data scientists who ensure data security and create mathematical models translating operational issues into actionable solutions (Business Analytics Info, 2017).

The energy-transition-centric context and economic situation is forcing companies to diversify their activities. Integrating these new competencies and activities is prompting organizational change. Utilities have to adapt the company structure to the market by creating new branches dedicated to energy transition (Service de l’Observation et des Statistiques – bilan de l’énergie 2014).

Energy and Utilities companies are also adapting their partnership and acquisition strategies to become more competitive, increase speed and agility, and drive innovation. They adapt to the new market by creating new ecosystems. Indeed, Non-traditional players have been entering the energy market for some time now, transforming the competitive arena. These new entrants include telcos, technology and equipment suppliers, as well as construction firms, pure energy services companies (ESCOs), and internet startups. They have taken up positions all along the value chain: in generation, in networks and storage, in sales, marketing and services, in equipment installation, in energy management, as aggregators or virtual power plants, and so on. Traditional players have realized that they urgently need to create new partnerships in order to remain competitive. Some partnerships have therefore been established with major players outside the energy sector but also with some start-ups to become more innovative. Some companies have implemented startup incubators or programs to stimulate innovation or develop new products. Innovation becomes a major concern. Large companies are struggling to innovate and reinvent themselves because they are not very agile. They understood the need to work together.

Large utilities must also take account of new decentralized offers, which forces them to rethink their business model. Indeed, digital creates new territories with innovative and inspiring business models. The place of energy utilities is shaken. The customer no longer wants only energy access but also wants all the products and services associated with it. The major activity of major French utilities translates into services rather than energy production. They develop new offers for their clients.

The characteristics of the business models of digital actors are specific:

- A "B2C" origin of the digital giants: the ambition is to revolutionize the customer's experience and to retain it in the long term - Reasoning in "extended enterprise", on the overall value proposition and how it serves customers, suppliers, partners - Firstly, focus on a single service, which is filled with a very high level of quality in order to create a strong feeling of adhesion in the customer - At the center of the business model, there is usually a strategic asset, often intangible, The customer base - The price is determined not from the cost price, but from the value that the service generates for the customer

We can cite some examples of business models that develop because of or thanks to digital:

- Marketplace: Also called "multi-sided platforms", marketplaces (of the AppStore type, market place of Amazon ...) provide services to the actors upstream and downstream of the chain, thus putting powerful growth levers at the heart of their business Model. - Business models such as "underwriting" and "consumption for use" : The idea is to offer a basic service (often free of charge) to the customer and to keep him loyal by continuously offering new products that he can (or not) activate (see business models of Saas actors )

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3.3. STRATEGIES OF MAJOR FRENCH ENERGY PLAYERS: ENGIE, EDF AND RTE THREE MAJORS EXAMPLES

Information on the strategies of the three energy players presented here comes from the websites of these three players, interviews with people working in these large companies and press articles commenting on the transformations of these three players.

3.3.1. ENGIE

The sources used to explain ENGIE’s strategy are the testimonies of actors working within the group, informative brochures transmitted by the interviewees and the group’s official website (which regularly publishes the activities and updates the group’s strategic plan in the context of the energy revolution) (Engie.com, 2017).

Huge opportunities emerge for pioneering system players like ENGIE, thanks to new energy technologies (home energy management services, decentralized power generation, digital platforms, electrical mobility, and storage infrastructure).

ENGIE has perceived the need to reposition itself via technologies. In the past, access to a technology was not the major driver of differentiation. Indeed the competitiveness came from capability to deliver large and complex projects, the entry energy barriers were high, based on high capex intensity and large teams. Today access to a new technology and a new business model is the differentiating factor. The companies who contribute to the emergence of disruptive technologies will have access to them. The systems are smaller, cheaper to develop, which results in lower entry barriers and enables small new entrants to provide new solutions very fast, with strong market impact.

ENGIE is therefore repositioning itself from “Technology Integrator” that assembles accessible technologies from the shell to “Technology Solutions Frontrunner” that develops tallor-made technologies to address its customers’ problems.

ENGIE has tried to anticipate this break in the energy world. In 2014, the group defined a new strategic priority: the energy transition. ENGIE has always wanted to be a leader in the energy transition. This role of leader involves three rules that guide the group in its transformation:

- Rigorously selecting investments and development projects in line with the group strategy (low or un-carbonized activities, integrated services) - Being at the heart of innovation in order to activate the right levers in the invention of the world of tomorrow - Constantly reinvesting itself through decentralized modes of operation and rapid decision- making.

To deploy its strategy, ENGIE can capitalize on its non-negligible assets as a major energy player:

- Strong positions in the production of low or non-carbon energy, global energy infrastructures, customers solutions - Mastery of large centralized projects and decentralized solutions - A reputation as a responsible operator and employer - A recognized expertise of all employees - A global group in 70 countries

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ENGIE has launched a three-year transformation plan. This transformation plan has been initiated which aims at redesigning the Group’s contours. The 5 axes of this transformation plan are:

- Redesign and simplify the portfolio - Improve performance - Prepare for the future - Engage in digital transformation - Adapt the Group

These 5 axes of transformation could be further detailed.

 Redesign and simplify the portfolio:

The group first wants to refocus its portfolio of activities by reducing certain activities such as the production of electricity from coal and oil. Finally, the production of electricity from large power plants will be used less and less for decentralized solutions. € 15 billion of non-strategic assets in three years are planned. In the first half of 2016, the group already made 6 billion of non-strategic assets disposals.

ENGIE will invest 22 billion in three years over three activities: renewable energies, networks (gas in particular) and decentralized solutions.

ENGIE has a "zero coal" objective. At the beginning of 2016, coal accounted for 15% of ENGIE's energy mix, representing only 10%. 1/3 of ENGIE's coal-fired power plants were sold or closed. However, it is impossible for ENGIE to close all these coal-fired plants because some countries have no alternative energy to meet the energy needs of the population. Economic reasons thus come into play.

ENGIE wishes to focus on solar, renewable and clean energy, within its energy mix. In July 2015, ENGIE acquired 95% of Solairedirect, a leading player in the production of competitive solar energy. Thanks to this merger, ENGIE operates 22 photovoltaic power plants on the ground with a total installed capacity of 158,5 MW, ie 2/3 of the photovoltaic production in France.

 Improve performance:

The group has embarked on an ambitious operational performance plan LEAN 2018. This work plan makes it possible to constantly question what the group can do best in the way it works with its customers.

 Prepare for the future:

ENGIE has defined three guidelines for preparing the future: - invest in new technologies - be part of a favorable ecosystem - developing global and transversal partnerships

These objectives give rise to two time horizons:

- Within a short-term horizon of 3 to 5 years, ENGIE wishes to develop proven innovations: massive solar development, decentralized B2C production, energy renovation of buildings, energy demand management, green mobility

- In a long term horizon (over 5 years), ENGIE wants to anticipate breakthrough technologies by proposing competitive energy storage solutions, local energy autonomy solutions, large-scale green gas, hydrogen solutions.

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ENGIE wishes to make significant investments in emerging technologies with high growth potential and which are likely to accelerate the energy revolution: investment in digital, creation of a favorable ecosystem, construction of a portfolio of strategic technological partnerships.

 Adapt the group:

ENGIE must adapt its organization in order to seize new opportunities. The group must be:

- Agile and connected by establishing a decentralized and shared management, by providing a capacity for rapid and dynamic reallocation of resources and by sensitizing to market opportunities and trends

- Focused on technology: shaping tomorrow's market trends into a precursor, valuing innovative ecosystems and giving priority to access to technologies, but also by creating strong and innovative partnerships

- Talent oriented in order to develop the pride of belonging, to accompany employees, to develop diversity.

Since January 2016, the organization of the group has radically changed. This pillar aims to adapt the structure of the group and even to change its culture since the management of an abundance of very local installations, directly linked to customers who now wish to be actors, differs from the past model of large power stations. The aim of ENGIE is to stimulate the innovation and entrepreneurial dynamics of each employee. For this ENGIE seeks to lower the "center of gravity" of the group. They have decided to divide their business units by country instead of dividing them by sector or by industry and each business unit manages its PNL. Their goal is also to migrate all information systems on a single platform internationally, which is quite innovative.

Moreover, ENGIE offers its employees innovative solutions in order to rethink its Business Model, make it more agile and closer to the start-up business model. For instance, ENGIE has created an online platform allowing all employees to submit their ideas.

ENGIE wants to use digital as a catalyst for its transformation. Indeed, for Gérard Mestrallet, president of ENGIE, “Digital is not an option but a necessity”. Thus, the use of digital technology becomes necessary in each aspect of the transformation.

The three main catalysts for the digital transformation of ENGIE are the stimulation of Open innovation (Open Innov platform), investment in emerging technologies (ENGIE New Venture) and the signing of partnerships for digital transformation with the Digital Factory, a tool and competence center.

Digital is at the heart of the transformation of the group. To implement this digital transformation, ENGIE will invest heavily in 5 and 10 years to the tune of 1.5 billion euros, in the digital oriented energy transition.

 To redesign and simplify the portfolio, ENGIE wants to digitize the customer experience and optimize the use of energy. ENGIE is developing connected objects and the SIGFOX network, an IoT (Internet of Things) solution to make buildings intelligent and to save energy. To digitize the customer experience, ENGIE has launched the Happ-e electricity offer, a 100% online offer that offers a cheaper rate than the regulated rate of energy and allows changing electricity supplier very simply and very quickly. ENGIE has also partnered with Homni start-up and developed the Homnistat, a smart thermostat that allows users to remotely control their heating from their smartphone. The thermostat is able to optimize the heating to reduce the user's bill while guaranteeing the desired comfort on his return.

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 To improve performance, ENGIE provides predictive maintenance, real-time dashboards and smart meters. ENGIE offers its technicians in the field connected glasses in order to have a connected help of a remote expert. Before the introduction of these sensors it was not obvious to make suitable models. This enables smart meters to provide more accurate information about customers' energy consumption. This allows customer offers to take into account customer life parameters. These are more targeted offers in relation to the lifestyles of customers.  To prepare the future, ENGIE offers new products and services based on data analysis to imagine the connected homes and cities of tomorrow. For instance, the DIYA ONE robot was created by ENGIE in association with the start-up Partnering Robotic. This robot is able to purify the air moving inside buildings, reduce energy consumption, and manage requests for intervention of the occupants.  In order to adapt the group to the energy transition, ENGIE has created several innovative partnerships. By partnering with the Deepki start-up, ENGIE offers energy efficiency solutions. Indeed, the “Deepki Ready” application reduces the energy bill of a fleet of buildings by exploiting the existing data of the park and crossing them with extremal parameters to identify potential sources of savings. Moreover, new organization of Business Units aims to promote and implement digital initiatives (creation of new applications) and to accompany and accelerate the cultural change implied by digital.

3.3.2. EDF

The sources used to explain EDF’s strategy are the testimonies of actors working within the group, informative brochures transmitted by the interviewees and the group’s official website (which regularly publishes the activities and updates the group’s strategic plan in the context of the energy revolution) (EDF France, 2017).

In the context of energy transition, EDF has defined a strategy called CAP 2030, which carries the ambition of the group: “to be an efficient and responsible electrician, champion of low-carbon growth”.

This strategy is based on three main priorities:

- Increase customer proximity - Doubling the production of renewable energies by 2030 - Tripling the share of business carried out internationally by 2030

 Increase customer proximity:

To increase customer proximity, ie to help users better consume, understand and control their energy bills, EDF creates new decentralized competitive solutions, new customized energy services and smart grids.

This strategic pillar is therefore highly energy efficiency oriented. EDF has developed the communicating meter Linky and plans to deploy it in all French households.

The Linky meter is a smart counter communicating, ie it can receive orders and send data without the physical intervention of a technician. The Linky meter records the consumption reports, transfers them directly to the Enedis distributor, which forwards them to the electricity supplier of the user. The electricity supplier then calculates the user's bill based on the smart meter data. Throughout the journey the data is secure and protected. The Linky meter therefore has many advantages: automatic remote control of the consumption of each user, a rapid adaptation of the power of the meter, a better control of the consumption, easier control of the appliances.

In addition, the smart meter makes it easier to integrate new energy uses (electric vehicles, use of renewable energies) and to extend the possibilities of steering equipment on site to better control consumption and budget.

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The development of connected objects also paves the way for new digital customer services.

To be present on the connected home market, EDF has created a dedicated subsidiary: Sowee. Before being a subsidiary, Sowee is a remote control coupled to a smartphone application, able to remotely adjust its natural gas heating via a sensor installed on its boiler. The user chooses to define his ideal temperature or the monthly budget he wishes to disburse. Sowee also provides information on air quality, humidity, CO2, and advice on alerts.

For instance, EDF has developed the service "e.quilibre", an application to monitor its consumption. Registration for the service requires an accurate and detailed questionnaire that identifies the needs and habits of each user. The application then allows a direct monitoring of the consumption in kWh and in euros on a monthly and annual rhythm. It is also able to compare the performance of a user focus with the average French household of similar characteristics. Each user benefits from a specific analysis of his consumption, allowing him to optimize it. Advice and "eco-gestures" are offered by the application according to each one.

On the occasion of the COP21, EDF has also given the possibility to all its customers to mobilize for a low carbon world. By subscribing to a renewable offer, customers benefit from guaranteed renewable electricity and have the opportunity to participate in the financing of research programs in the field of renewable energies. This offer is 100% renewable electricity supply. This offer is aimed at individuals and professionals and gives users the opportunity to become players in their consumption. By choosing this offer, customers are assured that the equivalent of 100% of their consumption is injected on the grid in the form of renewable electricity. Indeed, it is impossible to guarantee the delivery of renewable energy directly to the customers, whatever its origin; the electricity is injected on the network and then distributed in an undifferentiated way to the customers. As part of this program, EDF is therefore committed to ensuring that a quantity of electricity of renewable origin equivalent to the consumption of customers is injected into the French network.Customers who have chosen this offer also contribute to the financing of research and development of renewable energies in France. Indeed, for each MWh consumed, EDF allocates 2 euros to the PREVINERGY program to participate in the research on tools for forecasting the production of electricity from renewable energies.

To work faster and be innovative, EDF has created a dedicated lab within the sales department. This lab is a collaborative work space around innovation that aims to decompartmentalize the various services.

 Doubling the production of renewable energies by 2030:

Concerning the increase in the production of renewable energies, EDF wants to rebalance its mix of energy production by accelerating the development of renewable energies, guaranteeing the safety and performance of existing nuclear and new nuclear power. EDF has set up a new organization to respond more effectively to the challenges of energy transition: stable nuclear production to offset the intermittent production of renewable energies. This new organization will allow a better efficiency in the projects and allows the integration of AREVA as a subsidiary of EDF.

Currently EDF has a net installed capacity of renewable energies of 28 GW. The company has set a goal of doubling the installed capacity to 50 GW by 2030.

To meet this target of doubling installed capacity, the Group's strategy is based on continued investment in renewables. Each year, more than a third of the Group's gross industrial development investments are devoted to renewable energies.

The Group must continue to develop the most competitive renewable technologies (hydraulic, ground wind, solar photovoltaic, etc.), help optimize technologies that are promising but less mature and still costly (offshore wind, hydroelectric, solar concentrating) and Continue to invest in innovation.

EDF wants to form a specific renewable energy pole by bringing together the subsidiary EDF EN (wind and solar energy) and the hydraulic division.

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Currently EDF has Europe’s most competitive and discreet production base and wants to double its capacity of renewable energies in the wind, the solar, the marine and hydraulic energies in the world.

 Tripling the share of business carried out internationally by 2030:

To triple the share of Business carried out internationally by 2030, EDF plans to deploy on new geographies by developing low carbon solutions in growing countries while consolidating its positions in Euripe. EDF is currently heavily involved in Europe. EDF wants to increase its share of the international market by 2030 and establish itself as a reference player in 3 to 5 countries while developing a significant presence in a dozen countries.

3.3.3. RTE

The whole strategy deployed by RTE in this context of energy revolution will not be detailed here. However, we will talk about its Open Innovation initiative, which fits perfectly into this energy transformation (usinenouvelle.com/, 2017).

Indeed, RTE, French high-voltage network operator, announced the creation of an investment fund for innovative companies with Truffle Capital. RTE is committed to supporting 4 innovative start-ups and signing a contract with The Cosmo Company to industrialize an application. This open innovation becomes necessary as RTE's business evolves with the penetration of renewable energies, the multiplication of interconnections and consumers who self-generate their electricity or reduce their consumption on demand. In order to remain competitive in the market, it is therefore essential to create partnerships.

The aim of this initiative is therefore to create an ecosystem capable of deploying internationally in order to maintain a competitive position in the market. The second objective is to work on sensors and software that will enable the network to be monitored more closely to exploit it to the maximum.

3.4. THE ROLE OF WEAVE, A CONSULTING FIRM, IN THIS ENERGY REVOLUTION

3.4.1. THE ROLE OF WEAVE, AN OPERATIONAL STRATEGY CONSULTING FIRM

Consulting companies are there to help these major energy players to evolve and transform. Weave, consulting firm in operational strategy, supports major energy players in their transformations.

Weave provides guidance to its clients on defining their strategic ambitions to the operational declination of the problem raised throughout the energy industry’s value chain.

The main problems of the customers are the following:

- Accelerate development (growth levers, asset portfolio management, risk management) - Innovation in the business (new business models, new products and services, initiation of a light and sustainable innovation approach) - Optimize the operational model (organizational optimization, increase competitiveness, improve profitability)

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3.4.2. WEAVE’S OFFER

Weave has a clear vision of the major issues in the energy sector:

 Environmental demands are constantly on the rise (mistrust of fossil energies, historical defiance of nuclear power reinforced by the Fukushima accident, opposition of the inhabitants to all that is visible)  A blurred actor's play: lack of a European energy policy, second-tier players taking place as soon as possible, many emerging start-ups  Increasing energy needs worldwide: vital energy needs to maintain a certain comfort of life, mobilization of all energies (coal, lignite, oil, gas, nuclear, hydraulic, intermittent)  Signals taken that do not promote good transformations: a very investment-intensive sector (new very expensive production systems, energy efficiency projects which involve replacing the existing one with an expensive tailor-made) biased by mechanisms of taxes and subsidies.

Weave's areas of excellence to meet these challenges are:

 Strategy and innovation (adoption of growth strategies, release of innovation potential with design thinking)  Business transformation (construction and deployment of a high-performance organization serving clients' ambitions, piloting of major business transformation programs)  Excellence in operations (development of a culture of operational excellence as a vector of sustainable performance, management of business performance and investments)  Customer Experience (Building an Enhanced Customer Experience)  People transformation (building the foundations of a positive company, which puts the uncertainty of the current world at the service of performance)  Business Technology (accelerating the digital transformation of companies from incubation to execution through innovative smart business models between technologies and uses through better exploitation of the data)

3.4.3. THE COMMERCIAL PROPOSALS ISSUED BY WEAVE FOR MAJOR ENERGY PLAYERS

 TOTAL - Development of an offer of products and services related to the energy efficiency of buildings in Africa zone Middle East.  DALKIA - Analysis of the competitive environment of the energy services market in France and internationally (2014)  AFD - Study on the operational decline of the positioning of the French Development Agency on the gas sector  AREVA D & S - Support for the implementation of phase 2 of the organization of the dismantling division and industrial operator.

 A MAJOR PLAYER IN ENERGY SERVICES – Implementation of a study on the impact of digital and the evolution of professions, sectors and business models

One of our customers, a leader in energy services, offers energy efficiency solutions for the energy transition of businesses and communities. The business of this player in energy services is to provide services to each territory, through the achievement of 3 key objectives:

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- Controlling consumption; - Guarantee energy performance; - Development of local and renewable resources.

The aim of the study is to outline the evolution of this customer's business lines and business models with the evolution of digital technology. The study should also describe the potential impacts of digital transformation on the business model of this major player in energy services by customer segment, in line with market dynamics and competitive (emerging new players) in progress and predictable.

The objective of this major player in energy services in this study is to identify and prioritize the subjects to be taught in order to approach the digital turn as smoothly as possible. These subjects will feed its social ambition, its SI master plan and its roadmap for the development of offers and IT applications.

Weave proposes to accompany this major player in energy services through an innovative approach in three stages:  1st Stage : Projection of the possible A team of experts (sector experts, prospectivists, designers, science fiction writers …) to create a fiction that is likely to materialize the potential opportunities and dangers for the major energy player in energy services. This phase will enable to achieve a state of the art describing the market trends and an analysis of the initiatives taken by the key actors, in the form of 10 communicating cards. These 10 trend charts will show key players, opportunities and threats related to a disruptive theme in the market (examples of trends to be explored : changes in urban spaces, changes in governance, sustainable building, digital revolution, energy and climate, light economy …).  2nd Stage : The second phase of the project will involve the preparation and drafting of a briefing note on the visions gathered during the interviews with the actors of this major actor in energy services, the implementation of a one-day workshop of restitution and projection and the imagination of 3 scenarios of ambition illustrated.  3rd Stage : This third and final time will provide an analysis of impact by this major player in energy services segment by delivering: - an analysis of threats and opportunities for each customer segment - a draft strategic positioning - a prioritization of priority actions for this major player - a sensitivity analysis The final deliverable will compile the entire impact analysis for the major player in energy services of the consequences of the digital transformation described in the 3 scenarios conceived in the workshop, as well as a recommendation of the priority actions.

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3.4.4. THE MISSIONS CARRIED OUT BY WEAVE FOR MAJOR FRENCH ENERGY PLAYERS

ENGIE – Support ENGIE’s digital transformation through IT communication. (mission in progress)

The aim of the mission is to support the Group Digital and IT Department at ENGIE on its communication around IT and the Group’s digital transformation. In the energy sector, the digital revolution has completely changed the relationship with the consumer. This paradigm shifts the way we address our offers across a whole company. ENGIE has decided to bet on innovation and a transformation of its operating methods to build tomorrow's energy future. The digitized company leverages various technologies such as mobility, big data, the Internet of objects to generate additional revenues and minimize operational costs.

To accelerate the digital transformation of ENGIE, the DDSI is seen as one of the main actors driving this transformation, in animating and supporting the digital and IT functions of the ENGIE Group. One example, is the setup of a Digital Factory at ENGIE in June 2016. This factory puts numerous digital tools on disposal for its 24 national and international Business Units, and uses the Agile method to help those BUs with external partners to deliver their IT Projects in a more modern and new way. In order to accelerate the digital transformation of the group, it is essential to use digital to serve the communication strategy. Digital is a media, a real work and support instrument for new services.

Currently, the digital management of information systems has two major communication issues:

- Generating synergies between its employees and valuing them - Bringing digital awareness and acculturation to all ENGIE employees

The strategy of ENGIE is to homogenize the digital and information technologies. Indeed, given the current context, information technologies and digital can no longer be dissociated. One pure example of that sentence, is the position of Yves Le Gélard, not only Group CIO, but also Group CDO. The mixture of both positions shows the path ENGIE is taking towards digital.

Thus, communication appears as a major lever for the revitalization of the Group. Indeed, communication within the IT & digital sector and towards the group and the external will make it possible to shift all collaborators in the world of digital and to make the business branches adhere to the digital solutions built by the Group Digital & IT Department.

Weave's conviction is that a company is digital if it comprehends 4 major changes: if it is connected, intelligent, agile and social. That is why to be able to successfully complete its digital transformation; ENGIE must clearly identify its expectations and move quickly to the implementation of new services related to it.

Weave’s approach is a methodology based on 4 pillars:

- ANALYZE: the analysis of the environment makes it possible to rely on the existing ecosystem - DEFINING: the most important step in defining expectations (the intended target, the messages to be delivered, the expected impact) - DESIGN: IT expertise coupled with ENGIE's communication skills allow to propose solutions adapted to the needs and rigorous project management - MEASURING: Indicators are essential to follow communication actions. It is important to monitor satisfaction around recurring actions

The methodology applied by Weave for this mission is divided into three major batches.

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Lot 1 consists of concrete actions to communicate with the IT and digital sectors. Through this first pack, weave supports the entire IT and Digital sector in the creation and deployment of operational communications, guarantees the coherence of communication actions and proposes innovative actions to be implemented (examples: mini websites, communities, audiovisual productions ...).

Lot 2 consists of support for event projects. Through this second batch, Weave ensures the organization of internal and external professional events in France and abroad, is committed to meeting customer needs and guaranteeing their satisfaction and proposes creative and innovative animation concepts in project steering.

Finally, lot 3 consists of concrete communication actions in the field of digital in-house. Through this third batch, weave implements an internal communications strategy to accompany the group's digital transformation in order to involve all collaborators in this dynamic. More precisely, weave proposes to set up a device of diffusion of the watch at 3 speeds for a consumption of the information diluted in time and multi formats:

- The digital minute: a daily newsletter that keeps employees up-to-date on the latest news - The trend of the week: a weekly synthesis including more detailed analyzes than in the "minute of the digital" - The "what's hot" of the month: a monthly trend book developed over the water, powered by daily and weekly analysis

ENGIE just recently published its financial results, and moreover the results of that 3 year transformation plan it took on last year. The results given by Isabelle Kocher, its CEO, were very positive, showing that the Group is actually in advance of its transformation, and that the digital shift is very much embedded. 2 more years to come! And weave hopes to remain part of it!

 GrDF – Successfully complete the market and digital transformation of the Development business.

GrDF is a major player in natural gas in France and Europe. It is an independent subsidiary wholly owned by ENGIE. GrDF is the main operator of the natural gas distribution network in France.

Since 2008, GrDF has evolved in a difficult environment: rising fuel poverty, insufficient awareness, very close monitoring for distribution players, tight pricing pressure, strong competition from other energy sources (strong competition from electricity, only 7% of cite natural gas as a preferred source of energy).

To boost the use of natural gas, GrDF has embarked on a new business project by 2018: the "Gazbooster" project. GrDF's ambitions are:

- To be the specialist in gas energy in the energy transition, a trusted partner of customers, suppliers, professional sectors and territories - Provide an exemplary public service both for the quality of service to customers and for the safe operation of the network - To be the distributor of gas recognized in France and abroad, for its level of requirement and its capacity to innovate - To be an attractive employer

These ambitions are defined by GrDF in three complementary axes:

- aiming for operational excellence in the practice of the trades to be recognized as engaged professionals - to make gas an energy of future by demonstrating on a daily basis its relevance in the energy mix

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- build together a responsible, more open, collaborative business model

Within this framework, the development department is to develop and transform itself. Weave's mission is therefore to assist the Development Department in defining and implementing their multi-channel and digital strategy.

The accompaniment proposed by Weave is structured around three major batches:

- Support for the piloting of the multi-channel marketing transformation project - Support for multi-channel marketing delegation - Support for digital transformation

For instance, to support the digital transformation of GrDF in this context of energy revolution, Weave carried out various inspirational benchmarks and identified various axes for improving their digital strategy. Weave also allowed GrDF to connect with key partners: Linkedin for instance.

 GrDF –Experimentation of an internal chatbot in the development department (mission in progress)

Chatbots represent a real digital innovation for large companies. Indeed, the current customer is oriented "services" rather than "products". He needs to be kept up to date on his client's journey and to have a direct and effective interaction with the company to which he subscribes his contract. Chatbots are a way to build this personal relationship with customers without investing heavily in marketing and development.

A chatbot is a computer program, based on artificial intelligence and designed as an instant messaging simulating a conversation with its user.

For users chatbots represent a significant time saving and a more intuitive experience. The user can access real-time services, products and information from multiple brands.

Chatbots are an innovation at the crossroads of artificial intelligence and customer relations. Indeed, equipped with artificial intelligence, chatbots are software robots capable of responding to users’ requests by finding adapted answers in databases, but also by carrying out certain autonomous actions (searches on the Internet, online booking, sending email, order tracking …).

Chatbots offer two major advantages for both the customer and the company: a simple and intuitive use for a playful experience and instant and personalized answers. On the French market, the adoption of chatbots is still discreet but is developing rapidly. On the American market, the main actors of online services (amazon, ebay, zalando, ...) have already massively adopted the chatbots. In addition, chatbots also allow internal applications to improve the interactions of companies with their collaborators.

Faced with the many assets of chatbot, the development department has launched an internal chatbot experiment. This experiment has three main objectives:

- sensitizing development teams to this new technology and the opportunities it offers - the reduction of internal requests with less added value - the promotion of innovation with a first experience of using chatbot at GrDF

The aim of GrDF is then to deploy Chatbots for the customers to ensure a better customer relationship.

The role of Weave in this mission is thus the framing of experimentation, the definition of cases of user usages for the chatbots, the choice of the provider (with the realization of a benchmark) and the support to the implementation of this chatbot. The consulting firm weave accompanies GrDF in the deployment

40 Papillaud Hélène and experimentation of these chatbots. Chatbots are a new digital way to tackle a new, more connected customer relationship.

 Company specialized in the maintenance of energy equipment - Offers 100% digital (with Weave), with the aim of developing the customer experience.

The client is a company specialized in the maintenance of energy equipment. It is a subsidiary of a large French energy group whose main businesses are the maintenance and troubleshooting of heating and cooling appliances running on all types of energy. This company makes BtoB and BtoC. It is currently the leader in the maintenance and sale of heating equipment.

It is essential for this client to accelerate its presence on the web for three major reasons. First, in the current energy context, new purchasing behaviors can be observed: customers are more demanding, wanting to choose between different offers and having the possibility to compare their offers via the internet, Access to all information, search for accessibility, availability and responsiveness. Second, competition is increased. Indeed, there are more and more websites dedicated to the sale of boilers laid (mychauffage.com, easy-chaudiere.com) and online distributors. Finally, the company has set ambitious sales targets. The group expects to realize 30% of its sales via the Internet as of 2018.

A first mission was carried out within Weave with this client for setting up and launching the Ma Nouvelle Chaudière site. Before the establishment of this website, the company prospected customers only by moving or via call centers. The implementation of this site has made it possible to retain existing customers by offering them a simple and intuitive digital interface, but also to attract new customers via an innovative and comprehensive website that convinces them that gas is the Best solution for heating. Via this site, customers have only to fill in a form that allows them to be called and accompanied for the installation of their boiler. The service proposal is today a key element of customer relations. The company is convinced that current customers need support. Their customer's promise is a significant buying factor and a guarantee of quality.

Indeed, one of the company's solutions to increase its presence on the web is to launch an online sale site of boilers delivered and installed to win new customers and remain competitive in the market. In this context, a study was carried out to identify the main customer expectations when replacing their boiler.

The analysis of customer behavior analyzed for this mission revealed that:

- 90% of clients plan to change their boiler when it fails or shows signs of fatigue - 83% of clients are primarily interested in a local heating contractor

According to the study, the main customer expectations when buying a boiler:

o The quality of the boiler (43%) o The competitive price of the boiler (20%) o The guarantee of a secure installation by a professional (15%)

The study also revealed that there is a real market for online sales and installation of boilers at home. Indeed, 1 consumer out of 5 adheres to the realization of a 100% online estimate or the purchase of a boiler via the internet. The target client is the man aged 40 to 59 who wants to buy a boiler as part of a project to purchase equipment or carry out works.

The digital promise of the online boiler sales site of the company concerned is based on three major pillars:

- A heating expert dedicated to the project, proposing an accompaniment throughout the project until the start of operation of the boiler. The project is therefore customized, adapted to the needs and housing of the client. The site offers the customer a selection of boilers with high energy performance and experts available 6/7 all day by telephone and mail

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- A boiler and installation guaranteed, maintenance of facilities, after-sales service, a technician and an agency close to his home (more than 200 agencies in France) - A competitive price and guaranteed deadlines: a commercial proposal issued within 2 hours, a visit to prepare the installation within two days.

The client's web offer is differentiated by advice and support. It wishes to propose a real value-added offer with VIP treatment in the branch, expert advice, tariff coherence whatever the sales channel (digital or physical). The aim of the online boiler sale site is therefore the setting up of a site to retain existing customers and convince new customers that gas is the best solution. Weave's conviction is that customers today need support, the customer's promise is a buying factor for the customer and a guarantee of quality. In order to function, the online boiler sales site must therefore be customer oriented and offer a choice of services for the customer.

A redesign of the company's website was also carried out within the Weave firm. The objective of this mission was to completely rethink the client's website. In order to do this, it was necessary to rethink the customer journey according to customers' desires, expectations and knowledge, to define clearly and precisely the strategy and the promise of the site and finally to make the link between the site and the process existing.

Another solution of the company to increase its presence on the web was to develop an online shop of connected objects in order to create traffic. 50five is a START-UP specializing in connected objects that has already launched online platforms for the sale of connected objects in the Netherlands, England, Belgium. 50 five and the company have partnered in France to launch the same type of platform for the sale of online connected objects. The role of Weave in this mission is the framing of the project: the adaptation of the content of the platform, the definition of the product offer and the definition of the customer path.

As part of this mission, a first step was to list all existing "connected objects" products in order to analyze what is suitable for the French market; To consumers but also to competitors. This made it possible to define the width of the range (number of different products) and the depth of range (number of different models for the same product) of the internet platform.

Currently, digital distribution models are evolving. As regards the distribution of accessories, there are two major challenges: the need to quickly find accessories, the possibility of comparing the prices of accessories, the importance of significantly increasing the income generated by the sale of accessories and To be present where Customers buy accessories online.

From this point of view, Weave's recommendation for the distribution of accessories for the energy company is as follows:

- Proposal of accessories in complementary products in the tracks of equipment subscription and sale contracts - Creation of an online shop dedicated to accessories on the site engiehomeservices.fr - Establishment of partnerships with pure players specialized in online distribution of products (Amazon, private sales, etc.)

However, the company must take into account the risks associated with competition in the digital ecosystem. The company faces a multifaceted digital ecosystem in a context of reduced acquisition costs for its customers: risk of confusion on the territory of the company's brand, risks of a significant increase in registration costs and Acquisition, intra-group competition context.

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3.4.5. HOW CAN WE IMAGINE THE FUTURE OF LARGE UTILITIES WITH WEAVE?

Currently, the major French energy players are transforming themselves to face the new energy challenges imposed on them. Their transformation requires accompaniment because it is a real structural, organizational and cultural reorganization. The consulting firms allow this support and allow the large energy companies to see more clearly within these major transformations. Indeed, Weave has expertise in restructuring and support in the implementation of new strategies that are not owned by large energy companies. The retreat of this consulting firm allows it to have a good overview of the current energy context and to implement its various skills to serve the major energy players in their transformation.

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4. CONCLUSION

This part concludes on the work presented and enlightens the knowledges gathered during the master thesis realization at Weave.

The current energy context is a difficult context for major French energy players. Energy prices go up and down, there are more and more laws relating to the ecology and the energy transition which have an impact on the modes of energy production and finally, new players compete with certain parts of the energy value chain. It is therefore essential for the major French energy players to reinvent themselves, to rethink their mode of operation, their modes of production and distribution of energy, their organization, their strategy and their culture. The major French energy players must therefore rethink their business model as a whole, to remain competitive in the market and to face this energy transition.

To cope with these new constraints, the major French energy players are adopting new strategies that require time to implement. Operational strategy consulting firms, such as Weave, are there to accompany them in these transformations from a technological, operational, structural, organizational and cultural point of view. Weave helps the major energy players to deploy these new strategies, from the design of the strategy to its implementation.

As a future engineer, it is very important to understand the link between technology and society. Energy news impacts very widely the energy strategies of the major French energy players, particularly in this context of energy transition in which all current energy models are brought to evolve.

Thus this study clarifies and synthetizes the current energy challenges and the transformation of major French energy players induced. This study explains the role of operational strategy firms in this context of transformation. It gathers information from many different sources: theoretical and academic sources, industrial opinions, Weave’s employees point of view and experts knowledge to make a synthetic but complete report.

To conclude on the realization process, from the researches of information, the raise of issues, the collection of the information during the interviews to the writing of the report, it has enlightened that, as future engineers we need to quickly identify an issue, formulate questions and sub-questions as the work is more and more precise. Finally, most of all, this study has taught me that the most difficult part is to be able to communicate synthetically and clearly the information, without losing important facts or the shades or the tricky parts of a notion, to create a clear report.

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ACKNOWLEDGEMENTS

Firstly I would like to thanks my manager at Weave Ms. VALLON Alizée and my KTH supervisor Mr. LEVIN Fabian for their advices, their teachings and their helps during my thesis project.

I would also like to thank all the people working in Weave who gave me time, who helped me in the collection of information, who gave me feedback on the missions. They carried out within the framework of the energy revolution. Without their collaboration this work would not have been possible and would not have been complete.

I am truly thankful to the Industry, Energy and Services entity and the Weave Company for offering me the opportunity to conduct my thesis and to live wonderful experiences within the company. Finally, I would also like to thanks the “experts” interviewed during the study, without their participation the study would not have been successfully conducted.

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APPENDIX

LIST OF FIGURES

Figure 1 : Energy mix in France in 2014 (Energie en France, 2017) ...... 9 Figure 2 : Electricity mix in France February 19, 2017 (Eco2mix Mix énergetique, 2017) ...... 10 Figure 3 : Major French Energy Suppliers (Liste des fournisseurs d'électricité en France, 2017) ...... 12 Figure 4 : Energy Value Chain - The regulated market ...... 13 Figure 5 : Energy Value Chain - The deregulated market ...... 13 Figure 6 : Methodology of the study – Objectives and means implemented ...... 17 Figure 7 : The redistribution of competitive cards in some sectors ...... 25 Figure 8 : Movements within the value chain ...... 26

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LIST OF TABLES

Table 1: Main sources of the study ...... 18 Table 2 : Conferences Attended...... 19

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 Rebière, B. (2017). "Un monde où l’énergie est 100% renouvelable est possible mais pas tout de suite" - leJDD.fr. [online] LeJDD.fr. Available at: http://www.lejdd.fr/Economie/Un-monde-ou-l- energie-est-100-renouvelable-est-possible-mais-pas-tout-de-suite-822034  Smartgrids-cre.fr. (2017). Les modèles économiques / L’évolution de la chaîne de valeur. [online] Available at: http://www.smartgrids-cre.fr/index.php?p=modeles-evolution-chaine-valeur  Smartgrids-cre.fr. (2017). Les modèles économiques / L’évolution de la chaîne de valeur. [online] Available at: http://www.smartgrids-cre.fr/index.php?p=modeles-evolution-chaine-valeur  Studen.fr. (2017). Le marché de l'énergie. [online] Available at: http://www.studen.fr/accueil/marche-du-gaz-de-l-electricite  Tétrel, S. (2017). La digitalisation obligée. Enerpresse Forum, [online] (11357), pp.8-9. Available at: http://embix.fr/wp-content/uploads/2015/07/2015-07-07-Debat-ENR-Forum- Digitalisation.pdf  Transition énergétique: le rôle majeur des Smart Grids. (2017). [online] La Tribune. Available at: http://www.latribune.fr/opinions/tribunes/20150130trib89f6b1abd/transition-energetique-le- role-majeur-des-smart-grids.html  usine-digitale.fr. (2017). Les fournisseurs d'énergie doivent se préparer au difficile virage de la digitalisation. [online] Available at: http://www.usine-digitale.fr/article/les-fournisseurs-d-energie-doivent-se- preparer-au-difficile-virage-de-la-digitalisation.N442677  usinenouvelle.com/. (2017). RTE ouvre son innovation aux start-up - Technos et Innovations. [online] Available at: http://www.usinenouvelle.com/editorial/rte-ouvre-son-innovation-aux-start- up.N369875  Wainstein, M. and Bumpus, A. (2016). Business models as drivers of the low carbon power system transition : a multi level perspective. Journal of Cleaner Production, 126, pp.572-585.  X-sursaut.org. (2017). Défis et atouts de la France face à la révolution énergétique mondiale par Antoine Huard (2007) | X-Sursaut. [online] Available at: http://www.x-sursaut.org/blog/croissance- emploi/defis-et-atouts-de-la-france-face-a-la-revolution-energetique-mondiale-par-antoine-huard/

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INTERVIEW JUNEL POPP (BUSINESS TECHNOLOGY CONSULTANT IN WEAVE).

H. Papillaud: Hello Junel, you work as a consultant at Weave in the Business Technology entity. You currently are in a mission at ENGIE. Could you tell me about the purpose of your mission?

J. Popp: Hello Helene. Indeed, I am currently working at the Digital and IT Department since the beginning of October. This branch is a new entity of ENGIE that links digital and information technology. This branch is very recent since it was created in the beginning of 2016.

H. Papillaud: Could you tell me why this branch was created?

J. Popp: The strategy of ENGIE is to homogenize the digital and information technologies. Indeed, given the current context, information technologies and digital can no longer be dissociated.

H. Papillaud: What is the new Group’s strategy?

J. Popp: Since her arrival as CEO of ENGIE, Isabelle Kocher has launched a major internal and external transformation program: the Group’s digitalization of 3 years for 5 billion euros. They have decided to divide their business units by country instead of dividing them by sector or by industry and each business unit manages its PNL. Their goal is also to migrate all information systems on a single platform internationally, which is quite innovative.

H. Papillaud: Ok, so what is the mission of weave within the Digital and IT Department?

J. Popp: Within the Digital and IT direction, I am responsible for the communication of Yves Le Gelard, the Group’s CIO and Head of Digital. He wants to communicate more regularly with his employees. For this purpose, he wishes to digitize his internal communication but also his external communication and stay aligned with the global communication of the group. In this context, I am also supporting the management of the publication media such as the quaterly newspaper called IT Mag, an internal podcast called IT Radio or a project video called IT Video.

H. Papillaud: What do you think about ENGIE?

J. Popp: ENGIE is moving in the right direction. Many digital projects are on the run. For instance, ENGIE has created a collaborative platform to make its skills available to all employees. This allows the emergence of small internal projects, which is very positive for ENGIE. Concerning the IOT partner of ENGIE, C3 IOT, the Group wishes to send 10 collaborators in California, Silicon Valley to train them for 6 months on the IoT platform. This initiative is very positive for the dynamics of the company.

The Group also created “ENGIE digital”, a studio based in Paris where employees can develop applications and make them available to Business Units.

H. Papillaud: ENGIE digitized very quickly and took many new initiatives. This is very positive for the Group, isn’t it?

J. Popp: Indeed, this is very positive for the Group that takes a good turn in the energy transition. ENGIE is ahead of the market compared to EDF for example. Digital is now a necessity for all major groups. Although ENGIE is currently the leader in the energy sector, it is a company that does not hesitate to take many new initiatives. However it is sometimes necessary to be careful not to be TOO

55 Papillaud Hélène innovative and get lost in these new innovations. You have to know how far to go to stay at the forefront of the market and stay competitive.

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EXTRACT FROM WEAVE’S REFERENCES IN THE ENERGY SECTOR

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THE WEAVE COMPETENCE CENTER - ENERGIES & ENVIRONNEMENT

Weave has built trusting relationships with a wide range of companies:

Pétrole Gaz Electricité Environnement

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