On Monday, our COO Maria McKavanagh was invited to speak at the Bloomberg Future of Energy Summit in London on the digitalisation of energy. She was joined by the Head of Innovation at Centrica to debate who will own the customer in the future energy system.
First things first, let’s ask ourselves why this debate is coming about within the energy industry….
New digital technologies, coupled with data, offer greater insights into the requirements and behavior of energy consumers, as well as an opportunity to build stronger customer relationships.
But at the same time, digitally controllable decentralized technologies and assets such as storage, PV, EV charging points, demand response aggregation and blockchain are allowing new entrants like Verv to create new types of consumer propositions and services, with the potential to erode the market share of incumbents.
This begs the question; are we looking at an energy evolution or revolution? And in turn, what impact will this have on the customer?
Let’s address the former first. In reality, nobody knows what the future holds in the next 5–10 years. But from our point of view, seeing new businesses like Uber and Monzo disrupt incumbent industries and provide more choice on the market is quite foretelling of what the future could hold in the energy space.
Peer-to-peer is certainly becoming more and more the new normal, offering consumers lower price points and more options. From our perspective, enabling renewable energy to be traded among peers means cheaper energy costs and more readily accessible green energy. The electrical data marketplace that we’re looking to create empowers the consumer to be in full control of their data and monetize it, selling it to who they want and for how long.
One thing is for certain, putting the consumer at the heart of our business model is core to our offering. But there will also be a place for energy incumbents in our ecosystem should they choose to join the energy transition, which there is certainly appetite for having partnered with multiple utilities on our energy trading projects. Having the ability to offer a peer-to-peer energy trading tariff to their customers will provide them with product differentiation whilst staking tokens as part of our local aggregator system will open them up to a new customer base.
In their current states, incumbents are essentially on a ‘race to 0 profits’ as they look to compete with new entrants and disruptor technology which requires them to make their prices increasingly more competitive in order to retain customers. Incumbents know that this can’t continue and that they will need to adapt to a changing market where the consumer is put first. This is why we’ve seen an increase in investment in blockchain start-ups and a host of new pilots underway as they get a feel for the future.
So who will own the customer in the future energy system? Some argue that it could be the grid infrastructure provider that owns the customer, others that it could be the likes of Amazon or Google who act as sort of brokers that provide customers with personalised supplier options.
We like to think that in actual fact the customer will own the customer, and be empowered to make informed choices about who and where their energy will come from. For too long the energy sector has treated us all the same. The secret to Amazon and Google’s success has been extreme personalisation in their product offering.
