The convergence in the relationship between energy providers and their customers is moving faster than ever, driven by a want to reduce costs on both sides and a desire for new and novel services. This new relationship is largely facilitated by the advent of new technologies becoming commonplace – technology such as smart meters, smartphone apps and new energy assets.
Each technology plays its own role in profoundly changing customer and supplier behaviour. In recent years, smart meters have enabled us to have a live view of all electricity activity in our homes. Apps, and other tools, help us to visualise and track this activity empowering customers to take control over their consumption.
Today, new energy technologies (Electric vehicles, PV solar, electric storage batteries and different types of electric heat generation) are enabling a whole new era of active collaboration between utilities and customers, building on the foundations of smart meters and apps.
The direction of travel (as seen in the image) can be described as follows:
- Engagement, which was largely enabled by smart meters, is about starting a dialogue between the customer and energy suppliers, so that customers can understand their energy consumption and spending better.
- Empowerment goes beyond simply supplying the customer with the correct consumption data. It is about providing actionable options, using apps and other tools, which enable the customer to control how they consume a product or service on a daily basis.
- Collaboration, enabled by new energy tech, is when a partnership exists between the customer and the energy company. In one of many examples of this, the customer not only buys from the energy supplier, but also sells his/her own services back again (surplus generated electricity, storage and demand response services). Here, both parties benefit from the relationship and together create the new energy future.
Time-of-use tariffs are a good example of energy suppliers providers moving in this direction of travel, something which we explored in one of our Delta-EE podcasts. Under a ToU scheme, customers are provided with an hourly changing (sub-hourly in some cases) rate. The price reflects real-time production and delivery costs of electricity. This means that customers can essentially choose to consume electricity during times where it is at its cheapest. These types of tariffs are now starting to emerge all over Europe. True Energy from Denmark and aWATTar from Austria are both interesting case studies on this type of business model.
aWATTar, as one of the first companies in Austria and Germany, offers a dynamic hourly tariff, which passes on the prices from the market to the customer. What makes them unique is their development of a proprietary API which can be used by developers, partners and end-users to access grid electricity data. Products, using this data, linked to the aWATTar API, such as heat pumps, EVs or batteries, all receive automatic data on when energy is green and/or cheap. This empowers customers to be able to use electric heating or charge their car when it is cheapest. The aWattar platform is also a good example of a company facilitating demand response, thereby enabling a collaborative relationship through load-shifting for customers.
True Energy is also an electricity supplier that sells electricity at an hourly rate, with pricing information automatically updated on their own proprietary app. This information allows customers to start or stop consumption based on the current price and their needs. True Energy further empowers its customers through enabling automatic smart-charging of an electric vehicle (EV), given user parameters, through their app. This means that customers can easily have their cars charged automatically, depending on their preferences. Going beyond this, True Energy also collaborates with users, using their EVs, to form a virtual battery. A customer’s car basically functions in conjunction with others to form a sizeable flexibility asset, which connects the Danish grid. This is quite an exciting feature which we really think indicates the future direction of travel for utility services.
The two companies are interesting indicators of how the traditional energy supplier model is changing. While both companies offer the same core product – energy – they have both augmented the offering through dynamic tariffs. Additionally, to differentiate themselves they have gone in different directions by adding different collaborative services such as smart EV charging or access to data APIs.
Time-of-use tariffs can enable a closer relationship between customers and suppliers. An important point to keep in mind, as the story of empowerment and collaboration unfolds, is how closer relationships will affect concepts such as customer loyalty and engagement. In the future, as new energy technology becomes increasingly widespread, it is likely that utilities who do not make a bigger effort to collaborate with their customers will be left behind.
This is definitely an exciting time to be researching the new energy frontier and we, here at Delta-EE, are going be keeping a close eye on future developments. This blog was written with inspiration from one of our own podcasts which can be found on our website. We will be issuing further research on the transformation of customer relationships through the Digital Customer Engagement service. For further information contact Mikkel Johansen, Research Analyst at Delta-EE.