Putting Innovation at the Core of the Business Strategy

The new energy consumer wants to be digitally connected with their suppliers and expects a more innovative level of interaction.
Published: Tue 24 Nov 2015

Competitive markets are forcing industries to connect more meaningfully with their customers so as to capture their attention and take advantage of a broader revenue stream.

The energy sector is no different. While innovation may not be so easy for an establishment that has been viewed as ‘unsexy’ for so long, there are signs that changes are being made. This was highly evident at European Utility Week where innovation was a key focus. Event organiser Synergy put together an innovation programme, a pavilion for start-up’s, an innovation hub, an education zone and a young talent programme. Impressive innovations were also awarded at the end of the event.

Engerati got some industry experts into the live studios at the event to discuss how the new energy customer should be accommodated and how innovation can create a number of opportunities out of this new customer-utility relationship.

There’s more to this new energy customer

Amaury Lamarche, Programme Director Customer Engagement, ENGIE, recognizes that there is a definite need for improvement in customer engagement in the energy industry and that a big cultural change will be necessary for utilities to change. He explains that a drop in price and improvement in service is a good starting point when aiming to win a customer’s trust because other industries like telecommunications are doing just that. Energy comes across as a highly complex product/service so it is important to simplify it and make it user friendly for customers, he says.

He adds that the effective  use of data can help utilities work out exactly what their customers need. “Customers can no longer be viewed as a point of consumption-they want options and useful recommendations. These must be personalized and made relevant to all customers. This will open up new opportunities and revenue streams for utilities too.”

Take risks to stay ahead

Inken Braunschmidt, CIO, RWE, says that the company is so passionate about innovation that they have put it into the heart of their business strategy.

She explains that the future energy system is no longer about electrons-it’s a system of communication, infrastructure, logistics, mobility, security, and much more. It’s about looking for business models beyond the core, she adds.

New entrants are forcing the energy industry to innovate. She says that utilities must take the risk of developing something new around the core of the business even if it is disruptive to their current business models.

“Rather take the risk than allowing new entrants to take the lead. Although change can be a challenge, there are many opportunities too. RWE has a large existing customer base and we have the opportunity to serve them better through innovation and even attract new customers.”

Obsess over your customers’ needs

Anders H. Lier, CEO, Enoro, says that utilities should be obsessed with pleasing their customers. He says that there is a need to drive innovation but it can’t happen in isolation-customers need to be a part of this process since the industry should be catering for their needs. “Validate ideas in the market. Think lean and radical. If something works, scale it up fast because the disruptive forces are here already.”

He recommends that utilities apply best practices to the utility business to find new growth initiatives.

Anders Dalgaard, Chief Project Manager, and Mette Nymark Hansen, Senior Market Developer, both from Energinet.dk, say that the Danish central data hub has been designed to increase competition in the industry. Customers will now have a wider choice as the hub gives new entrants easier access to the market.  

With this model, suppliers have to compete for customers so innovation will be taken to the next level. “While innovative products and services will drive the energy market forward, supply markets need the right incentives for suppliers to be competitive and for consumers to have a choice and be active and engaged about how they use their electricity. To make the link between the wholesale and retail market, you need new technology, an easy to access market and  high quality data.”

Customer responsibility will now be positioned at the commercial level of the value chain, they explain. The model also simplifies the energy transaction for the customer. “Customers shouldn’t have to worry about how they get their energy. They should be able to buy their power as if it were any other product in a shop.”