Smart technology
October 20, 2011
A new report from Ernst & Young shows that the UK Government’s desire for smart meters to be installed in all consumer houses by 2020 means that energy companies need to reinvent their relationship with their customer if they are to deflect competition from potential new entrants such as retailers, technology companies and banks.
Smart technology, means that energy companies will need to provide innovative services which enable consumers to manage their energy consumption. However, companies such as mobile phone operators, and leading consumer technology companies are in a better position to seize the opportunity more effectively than most energy companies.
Power and utility companies’ market position was exposed by the consumer research:
• In 13 countries, consumers categorised their relationship with their energy suppliers at best distant and at worst negative
• Consumers were critical of energy companies for operating solely to provide energy and bill customers for the service
• Excited by the prospects that smart meters provide them but question the motives of energy firms’ involvement
• Failed to understand why power and utility firms would want to provide them with tools to reduce their energy bills
Executives at 75 power and utility companies across the globe were also interviewed. They believe that they have a healthy relationship with their customers, and that customers will be happy to receive services from them whilst they can purchase cheap energy.
Despite this threat from new market entrants, there are still opportunities for power and utility companies to expand their business and maximise opportunities from the explosion in smart technologies, with power and utility companies needing to focus on developing a two way relationship with their customers.
Smart technology gives consumers unprecedented power to manage and control their energy use. In time, this will fundamentally shift the balance of utility-customer relations.
