Energy issues have taken something of a step back out of the limelight recently, so it is useful to see what we can learn from the lessons over the last few years.
We saw major customer protests about the rollout of smart meters, but, since the companies involved improved their communication with their customers and explained what smart grids can do for them, the tide is turning. In general, people now better understand what smart meters can do and most are now in favour of the smart meter rollout. But the industry has not followed up this positive change with more innovation and other services.
How different is this from another utilities industry – telecommunications? Over the last decade this industry has been able to delight customers with new services and new devices such as internet, broadband, smart phones, tablets and the upcoming wearables. These are all products and services built on top of the infrastructure and as a result customer attention and interest has been captured – and the broader consumer and media discussion is now taking place in relation to these new products. Remarkably, relatively little advertising is required. People love these new services – there is, in fact, a pull effect from customers for these services rather than a push effect from the suppliers.
The broader electricity industry – not just the electricity suppliers – will need to look for similar developments. A great deal of innovation is taking place in the energy industry as well, but it is mainly of an engineering nature, more focussed an internal developments, with no real direct link to the consumer. We need to be more focussed on how we can delight our customers and investigate what makes them excited about the products and services that can be built on top of the electricity utility.
This could lead to a structural change in the industry, whereby customers will be far more engaged in driving new developments such as home automation, energy savings, storage, etc. This would also influence governments and that, in turn, would stimulate them to be more proactive in the development of a national vision, creating a national direction and positive holistic national policies for energy saving, renewables, carbon reduction and sustainability – policies that will lead to the use of smart tools to achieve the energy and climate change outcomes we have been talking about for over a decade.
There are plenty of positive customer signs in the market that can be used to drive the market faster and further. Look at the enormous explosion in wind and PV installations and how energy gateways are now a feature in many households – some still a bit nerdy and in need of a good consumer design, but the signs are there. Storage linked to PVs and even distributed energy services linked to telecommunications services are all available for innovation and competition.
The big question is, how can this be further developed and packaged in a way that will excite customers? Can we learn here from the telecoms industry?
For this to happen the industry needs to take control of, or least more actively participate in, customer R&D and product and service innovation. If we don’t do this Google, Apple, Samsung, Microsoft and others will happily take it over. This could result in a similar stand-off relationship that now exists in the telecoms industry, where the incumbents failed to move to innovate and delight their customers. Those incumbents are now complaining that these ‘over-the-top (OTT) companies are reaping the financial benefits of their infrastructure while they are relegated to provide the commodity.
The telcos have nobody to blame but themselves. They were very slow to react when these developments happened – they had fallen asleep leaving the new contenders with a free run to enter the industry.
The same applies to the electricity industry. If we don’t take the lead there is no doubt that others will.
We need to develop a sense of urgency and excitement and learn more about the products and services that customers are interested in around home automation, energy saving, environmental issues, sustainability, etc. We need to get apps, software and product (software) designers involved in producing attractive products that allow us to better engage and interact with our customers. And we need to lift the profile of the industry among our customers and the broader environment, including our politicians.