Given my own passion for energy and the reshaping of our industry, the two days at the Future of Utilities Summit this week went by quickly. Set at Etc. Venues St. Martins in London, a quick walk from our Paul Street offices, participating was a no-brainer and I ended up staying for the entire thing, writes Hakan Ludvigson, CEO at Eliq.
In a way, the UK’s energy industry is in better shape than ever. Supplier switching is at an all-time-high and the freedom of choice for consumers has never been better (not to mention the rise of switching-as-a-service providers Labrador and Flipper).
Competition is the sign of a healthy market, isn’t it? At the same time, “choice” really boils down to price and renewable electricity as an option and with a race to the bottom as a result, the current market dynamics can hardly be sustainable and has already left two suppliers out of business this winter.
The Race to the Bottom
Listening to the speakers at the event, many challenger suppliers are starting to think about differentiation and creating a sticky service.
Ovo Energy CEO Chris Houghton delivered an inspiring keynote where he, to the backtrack of heavy-metal band Slade, introduced the concept of “guilt-free electricity” for Ovo’s renewable tariff and spoke their push into EV charging and partnerships with Nissan as well as lamp-post charging station startup Ubitricity.
In a panel, Igloo Energy CEO Matthew Clemow spoke about energy savings and smart thermostats. and Tonik Energy’s Steve Springett emphasised the importance of solving household needs around around energy and steering clear of smart home “gadgets” – taunting Centrica’s Olivia Khwaja in the next chair.
This wasn’t the only time the “big six” were subject of suddle criticism – in a panel session (well…debate, almost) on tariff regulation – E.On’s Sara Vaughan found herself alone against representatives from switching sites Uswitch and Which? and challenger Octopus Energy.
Overall there is a lot of talk about distributed energy resources, demand-response, energy storage and EVs, - including an interesting presentation on future trends By Capgemini's Alain Bollack - but very little have yet seemed to materialise and I was missing Green Energy UK - the first and only company to offer a time-of-use tariff to date.
What about the customer?
What I was missing was the customer perspective. With all this talk about technology the internal problems and friction of the industry, it's strange so little time was spent on what the customer wants and how to design a great user experience.
So many utilities have conducted so many pilots in the past year, so why is no one willing to share? I certainly have a lot to say about that but I'll save it for another day. ¨
The Strive for Customer Excellence session touched upon the subject. ThunderHead’s Lloyd Buxton (to the left) and Steve Molesworth from OrangeBus (to the right) highlighted the poor shape the industry is in when it comes to customer relationships – and so did Centrica’s Paul de Laat (although we’ll be more interested in Centrica’s input once they turn the erosion of their customer base around).
Confusing bills, smart meter installers that don’t show up and lack of transparency was highlighted and a lot of discourse revolved around getting the basics right.
So what about the future of utilities?
On lunch on Tuesday, I was fortunate to be a part of an interesting discussion hosted by EY’s Benoit Laclau and Rob Doepel on forthcoming tipping points when the falling cost of storage, solar and EVs make solar, EV and off-grid economically viable, considering the rising cost of distribution and centralised generation.
Octopus Energy’s Greg Jackson , Giovanni Coppola from Enel X and Chris Barnicot, CTO of SSE shared their thoughts an views on what the future holds.
EVs, distributed energy resources, virtual powerplants, home energy storage and flexible consumers.
This industry has woken up. It’s not a question of “if” or even “when” as much as “who” will make this happen – if utilities will manage to reinvent themselves and capture the new market, or if they will miss the boat in the way that telcos missed the disruptive communication technologies of the internet. Tesla, Amazon and Google were mentioned again and again by the speakers as potential future disruptors for the utilities industry.
These companies have certainly proven again and again that they know how to figure out what the consumer wants and how to deliver it, defeating all expectations on the way.
As long as the industry struggles to sell a free smart meter to the customer and an 3-page energy bill is the closest it comes with its customers, it (the utilities industry) is making itself a target for outside disruption.
If we want to secure the future of utilities, we should make engagement the theme for next year's event.