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Does the spike in energy prices mean anything for the energy transition?

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. 

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Engaging different customers in the energy transition

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.

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The path to energy customer engagement

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.

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The role of customer engagement in the energy transition

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.

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Missing the potential for the demand side in Texas

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?

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The State of the New Energy Market in 2021

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? 

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