It's A Utility Jim, But Not As You Know It...

The Engerati panel from ‘taxpayer’ to customer gives an overview of what is driving the customer centric utility.
Published: Wed 23 Oct 2013

 

It was exciting to host such a diverse panel at the European Utility Week, with representation from Ernst & Young, RWE Poland, Vattenfall and British Gas, all representing very different geographical scenarios.

It was quickly apparent that one size does not fit all. The panel started by discussing the motivations behind customer engagement and customer strategies.  They analyzed the general premise that utilities, unlike other retail commodities, provide “products” that are not luxuries but are actually fundamental human rights.

The panel was deeply engaging and provided some great examples and statistics on experiences to date and hopes on what can be achieved.

Drivers for change

Based on many conversations, as well as mainstream media reports - especially in the United Kingdom, one cannot ignore how politically charged and connected energy costs and supply are.

The threat of political intervention is a major concern for utilities across Europe and especially those in market-driven frameworks. Running a ‘retail’ business in tightly-regulated margins can be very challenging.

Utilities realize that they cannot have true market elasticity in their primary commodity and are therefore turning to retail solutions that require a market-driven relationship. It is for this reason that utilities have to build trust with their consumers.

We predict that utilities, who win consumer trust now, will become major retail forces in markets like the UK as they sell all manner of physical and digital goods and services.

Into the big unknown

The other major unknown discussed during the panel, which will cause massive disruption, is the concept of distributed and consumer generation.

It is our belief that this is not a case of 'if' but 'when' the tipping point for massive distributed generation adoption arrives. Technological and economical barriers exist but these will fall away to a potential iPhone moment in the world of micro generation. Based on this, the current utility business model is in danger of becoming unsustainable, casting doubts on future profitability.

Therefore, in order to remain relevant it is essential that utilities form a close and collaborative customer relationship.

Engerati Analysis

With technological disruption creeping over the horizon, utilities should take advantage of the tremendous potential available. This is especially true for utilities that adopt the customer centric view early.