As quasi-utility companies, Origin Energy Ltd (ASX: ORG) and AGL Energy Ltd (ASX: AGL) have in the past been considered solid blue-chip stocks. Their expansion into new businesses has altered the dependability of their earnings and now with new threats to their businesses emerging, investors really need to question if these stocks are in fact "blue-chips" at all!
Game-changer
The launch of the 'Powerwall" lithium-ion battery by US-based electric car company Tesla is set to be a game changer for the electricity and energy sectors not just here in Australia but across the globe.
The potential for a major shift to stored energy is a real risk for Australia's leading retail and wholesale energy suppliers Origin Energy and AGL Energy.
In many ways they have brought it upon themselves due to the outrageous electricity prices hoisted upon the Australian population, which have encouraged consumers to install solar systems and look for "off-grid" options to lower their long-term power expenses.
There are two obvious responses which Origin and AGL may utilise. Firstly, they may dramatically cut electricity prices to encourage consumers to remain "on-grid." Secondly, they may choose to join the revolution and position themselves as suppliers of batteries, solar and renewable technology and energy.
Ways to position your portfolio
It could be that companies such as Origin and AGL are quick to respond in the face of structural change, however, the general precedent is that entrenched companies 'fight to the last breathe' to retain the status-quo and it is the disruptors and innovators who capture the benefits from new technology development.
The newspaper industry is a prime example. Publishers remained focussed on hardcopy instead of online until it was too late, this stance allowed start-ups such as SEEK Limited (ASX: SEK) and REA Group Limited (ASX: REA) to snare market-leading positions at the entrenched publishers' expense.
So, while Origin and AGL could become leaders in the renewable sector it is possible that a new wave of companies such as RedFlow Ltd (ASX: RFX) (which has developed exciting battery technology) could stand to be beneficiaries of a shift to "off-grid" and localised energy production.
