There’s a famous saying, “never let a crisis go to waste”. The current energy crisis – while having a terrible impact on many customers – gives the energy sector a golden opportunity to get in shape for the energy transition.

The crisis, being felt to different degrees across Europe, is a consequence of several unrelated factors happening at the same time. Global demand for gas has picked up rapidly, some gas and power facilities have been offline, gas storage levels were lower than normal, and weather conditions resulted in low output from renewables.

Energy prices would have moved higher this year due to strongly recovering demand and constrained global supply, but the recent speed and extent of the price increase in gas and electricity prices in Europe has caught everyone by surprise.

I had a look at the statistics made available by the UK’s National Grid and this shows in the UK context at least the energy transition is a factor (see chart). The price spike has happened as electricity demand (A) has sharply increased in 2021 while generation by renewables (B) and nuclear/biomass (C) has decreased. As a result, the UK has needed significantly more generation from fossil (D) and imports (E). It’s a classic case of two big numbers moving in opposite directions at the same time, creating a gap that is large. 

The energy transition is a term familiar to us in the energy sector, and we might talk about the need to lead consumers through it. Yet do we adequately consider what this means for consumers and how this is realistically achieved? Even in countries with the lowest carbon footprints, there is still a range of people with beliefs from climate activists to climate change deniers.

The challenge is to bring customers on and through their own personal energy transitions, when people are at different stages on the journey with different motivations, needs and expectations. Therefore, energy companies need to have great insight into their customers to help them navigate their personal energy transitions.

I recently wrote about reframing the energy transition narrative, discussing the need to engage customers in order to bring them on the journey from having to buy commodity-based products based on price, to wanting to buy energy services based on value. But what does that path to customer engagement look like and what role does energy consumption data play? In this article I will help answer this by introducing our customer engagement framework and how it can help energy companies develop their strategies and toolkit to develop customer relationships and progress their customers’ personal energy transitions.

We break down customer engagement into four sequential stages – operation, engagement, empowerment and collaboration. We will discuss three of these in more detail later as we tend to ignore the first stage in the evolutionary process as it belongs to the past. It was characterised by a very functional, transactional relationship, where energy customer interaction with their energy supplier was largely conducted through a bill and subsequent payment, or any bill query which was controlled on energy suppliers’ terms and designed around the operational efficiency of their call centre processes. This stage has been largely resigned to history as companies recognise that power has shifted towards the consumer in liberalised markets.

Much of the energy transition narrative has been around the decentralisation of energy assets, the digitalisation of business models and the shift from fossil fuel to renewable energy generation. There is growing momentum in interest and innovation here and few in the energy sector will dispute the huge changes already underway and accelerating in the years ahead.

The predominant view is that this shift will be led by technology even at the end of the supply chain – solar and storage to reduce reliance on the electricity grid, heat pumps to replace gas or oil boilers, and EV smart chargers to overtake petrol pumps.

Sometimes it takes a crisis to spur innovation and change. The Covid-19 pandemic, tragic in so many ways, has seen dramatic changes in working practices that are now embedded in many companies.

Will the same be true of the Texas blackouts earlier this year, another tragic event that led to 5 million homes without power, over 200 deaths, economic loses projected to reach $200bn, and an almost total collapse of the grid?

Delta-EE tracks the progress in the transition from old to new energy in its annual State of the Market Report. This study gathers evidence of the shift from selling energy as a commodity to selling new energy products and services. It covers a broad range of product areas, such as eMobility, New Heating, Storage or Smart Buildings – both in the C&I and residential segments.  

What progress has been done in 2020 in the transition from old to new energy? 

Electricity distribution networks will increasingly come under the spotlight as the energy transition gathers pace. 

Distribution networks are entering a brave new age. They have done their job excellently in Europe in the previous decades – distributing electricity from the transmission system to households and businesses in an increasingly efficient, cost-effective, reliable manner. 

It feels like we are starting 2021 with some cautious optimism - perhaps not as much as we would have liked, but I for one, am upbeat. Whilst Covid-19 continues in waves, there remains much to be positive about for us in the new energy sector.

Governments and companies have all taken steps or reported news of continued optimism, which against the wider macro and micro global news is very welcome. Commercially we have seen:

This blog was written by Abhishek Sampat, Principal Analyst

We recently spoke to Ole Henrik Hannisdahl (CEO of Mer Norway) on our Talking New Energy Podcast about the key aspects to keep in mind to build a profitable charging network. As Norway has been the early adopter, then market testing playground for EVs, the world has been watching to see what works, and what doesn’t.