Delta-EE Research Blog

Keep up to date with our latest news and research by subscribing to the Delta-ee blog - just click on the button below.

Subscribe to our blog

Are the most exciting new energy business model trends too good to be true?

Some of the novel ‘New Energy’ customer propositions we are seeing coming to market feel more like the stuff of sci-fi – better suited to futuristic superhero films than your energy bill:

  • Fancy algorithms automatically working out what energy tariff I should be on and doing the grunt work of switching for me
  • My heating always delivering precisely 21oC of comfort without me having to touch the controls or equipment (I actually have mine set to 16oC! Am I warm-blooded or just thrifty?)
  • Trading the energy generated on my solar PV roof with a neighbour – in other words, becoming an energy supplier myself!
  • Electric cars making money as they supply the national grid, and we can sit back and watch TV/read a book
  • My energy supplier notifying me of inefficient, energy intensive appliances and recommending suggested steps to take to cut my bills… surely the opposite of what they’d really like to be doing??

Those of you following our ‘New Energy’ research work will be familiar with these business models, and a multitude more, and how fast they are becoming reality – it is only a matter of time before many transition from early adopter to mass market. See our recent whitepaper.

More and more companies from right across the energy space, as well as new entrants from e.g. a telecoms, insurance, water or automotive background, are looking at how, where and when to develop their ‘New Energy’ capabilities, and offer propositions such as those listed above.

Looking a step further ahead, at how innovative companies in this space are evolving once they have established their initial ‘New Energy’ offering or entry point, reveals an important interplay between the 6 core types of ‘New Energy’ business model options we have identified in our work.

The evolution of ‘New Energy’ business models 

 nebms chart

Having had the great job of speaking to hundreds of companies and analysing their ‘New Energy’ propositions over the past couple of years, it is exciting to see patterns emerging. Could the infographic above be the beginnings of a map, or blueprint, which allows companies seeking to pivot their business model understand where to begin, strategic options and ultimately how to reach their end goal?!

Some of the strongest trends we are seeing include:

  • Lifestyle Products as a starting point - Fundamentally, one has to know their customer and how for example smart home can work for them, before attempting to design more complex propositions. Even entry level smart thermostats, can prove a powerful and effective way to gain the necessary insight to understand consumers energy use patterns, behaviours and preferences. One of the key challenges here is whether energy companies and heating manufacturers have the “right to play” – or will the Amazons, Apples, Googles of this world, who already hold brand appeal/the customer relationship, grab this scape? (A topic discussed by colleague Arthur in his “Winter is coming?” blog.)
  • Marketplace Operations to Time-of-Use Optimisation, and vice versa - Many energy trading platforms (for example LO3 Energy, LumenazaOpen Utility) are looking at how they can, either directly or allow others, to leverage value from flexibility. Similarly, those beginning from a ToU focus are building capabilities and functionality that connect stakeholders and market participants – the marketplace rather than the products or services offered within them (e.g. sonnen, Sowee, Motionwerk).
  • Bundling as an overarching approach - Basic bundles e.g. simple up- and cross-sell of products and/or services are commonplace. The challenge and value today lies in developing “smart bundles” where the different constituent parts of the proposition complement each other and ‘make sense’ in the customer’s mind. It is utilising this approach where we see particularly noteworthy success, as explored in our Energy Storage Research Service’s latest in-depth focus report: Bundled Business Models in the Residential Energy Storage Market.

Every company tackling the question of how best to respond to ‘New Energy’ must develop their own unique strategy. Ultimately this will be based upon individual company strengths, weaknesses and priorities – evaluating what others are doing, especially first movers, is an essential part of the process.

How are you making sense of the disruptive ‘New Energy’ business models you see transforming the energy sector? I’d love to discuss comments and feedback on the framework we have developed – please do feel free to contact me on [email protected] or call 0131 625 3336 for a chat.  

With a sizeable prize up for grabs, the battle for...
Time for a new boiler? How to get the most bang fo...

Related Posts

Register now

Search Downloads

Delta-ee Bloggers

Administrator
97 posts
Andy Bradley
14 posts
Stephen Harkin
6 posts
Jennifer Arran
13 posts
Jon Slowe
20 posts
Lindsay Sugden
12 posts
Steven Ashurst
14 posts
John Murray
15 posts
Nigel Timperley
2 posts
Arthur Jouannic
19 posts

© 2004- 2019 Delta Energy & Environment Ltd.  | Registered in Scotland : SC259964

Site design and maintenance by Arcas Web Design

Subscriber Login