At the forefront of renewable adoption
The European utility industry follows strict guidelines of regulations for combating climate change and adopting renewable energy.
However, the heavy dependence on exports for the procurement of raw materials, components, logistics, and labor amid the ongoing energy crisis and supply chain volatilities poses challenges for energy companies. The latter use their home-grown renewables and fossil fuels for electricity production to cater to the supply needs. The implications? A rapidly escalating cost of electricity and a regulated energy price ceiling result in supply scarcity that affects ongoing customer commitments.
Utility providers are looking to channel a shift toward regulating the end-user demand to minimize the impact on supply and avoid sudden invariability in the grid.
Utility providers could explore a technology-driven step-by-step systematic approach, addressing all the customer touch points from awareness development to empowerment and adoption to service assistance. Let us dive deep into the four key levers utilities should pull to optimize consumer demand for energy.
Encourage reduced electricity consumption
Behavioral shift is imperative in bringing about change.
Awareness campaigns on energy savings and related bonus schemes across physical and digital channels will encourage prudent energy use. For instance, a Polish utility launched information campaigns on reducing the temperature in shared spaces with successive campaigns for advocating self-estimation of energy costs. Utilities can also explore incentive-based schemes that provide consumers monetary benefits for reduced consumption over a fixed period.
Empower consumers with self-service options
Utility retailers aim to offer control and flexibility to consumers for better energy management.
Smart home automation, dynamic pricing-based tariffs, and the integration of prosumers to the grid are providing consumers with the necessary control and flexibility. However, ensuring a seamless customer experience is crucial to realize these benefits fully. This includes providing easy-to-use self-service options allowing end-users to monitor and assess their consumption in real-time, optimizing energy usage, and reducing costs. We explore these three self-service options in detail.
a) Smart home automation
Holistic service play like app-based fine-tuning of heating, lighting, and home security solutions in real-time can help consumers manage energy efficiently with a click of a button (one such example is Iberdrola’s smart home systems). Water being another critical component of daily use, utility providers like Centrica are implementing leakage monitoring solutions with remote diagnostics through their Hive Active Heating and Leak Plan. Creating a one-stop platform for monitoring electricity, gas, and water consumption in a consolidated manner can be a game-changing proposition for utility players.
b) Dynamic pricing-based tariffs
Utilities are leveraging information, such as the time of use, to offer usage-based customized tariff options to restrict energy consumption during peak demand times. With differential pricing models during off-peak, mid-peak, and peak periods, utilities can encourage consumers to opt for flexible energy consumption. Specifically, utility retailers are proposing personalized pricing options, which can deliver a superior user experience resulting in faster adoption. Parallelly, retailers can use an integrated dashboard to determine energy usage, analyze customer behavior, and apply AI-ML for demand prediction to customize tariff plans further.
c) Integration of prosumers to the grid
Prosumers are increasingly becoming prominent stakeholders in the next-gen utility value chain. Potential use cases are evolving that let prosumers transfer the stored energy from their vehicles or stores to the grid. A vehicle-to-grid pilot initiated by a UK-based energy retailer who claims to share live charging and discharging updates presents one such instance. A German utility also took a similar initiative in the B2B space that provides an option to market stored energy to the electricity exchange if it is economically beneficial.https://www.enbw.com/company/the-group/research/smarte_digitale_energiewelt/energy-management.html Though such initiatives add to the grid’s complexity of managing distributed energy resources, they can address the energy shortfall challenge. If managed effectively, they can be the solution to balancing the grid.
Foster the adoption of renewables
The energy crisis has accelerated renewable energy consumption leading to green tariffs.
Utilities now have opportunities to steer green energy adoption at a larger scale by offering separate tariffs for homes and cars. For households, the UK's largest energy and home services company has designed tariffs to address electricity and gas needs by issuing certificates to support the claim of items that are obtained from renewable sources. On the other hand, app-based EV charging tariffs by utility retailers that offer an option to optimize the charging times based on AI-driven analytics are gaining momentum.
Creating personalized experiences is the way forward
IoT, analytics, and AI are crucial for implementing energy-saving measures for consumers.
While utility providers have been considering technology integrated measures for demand reduction, the wide variability of energy usage indicates significant opportunities.
Utilities should focus on a structured approach to curating experiences at each customer journey phase using technology. The goal is to empower customers to make better decisions and create a trustworthy partnership between the utilities and the end consumers to combat the energy crisis. Utility retailers can alleviate the supply challenges by optimizing consumer demand. They can create awareness, providing necessary infrastructure assistance, and enable personalized decision-making through digital offerings.