While utilities are facing multiple challenges including climate change, securing energy supply, increasing distributed energy resources, cyber threats and digitalization, the rapidly changing customer expectations may be the toughest challenge, according to a study released by EY.
The report, Navigating the Energy Transition Consumer, which is based on a survey of 34,000 consumers in 17 countries, states that increased focus on customer experience and the use of digital tools and consumer insights will enable utilities to remain competitive in a rapidly changing and competitive environment.
The report states that a customer-driven energy transition and digital transformation will pave the way for utilities to innovate their services and in the process will meet current and next-generation consumer demands.
The study identified the emergence of a new type of consumer – omnisumer – a person or business entity who participates in a dynamic energy ecosystem across a multitude of places, solutions and providers.
92% of the surveyed consumers have at least one new energy-related product or service in their home, 86% are interested in self-generation, 25% are considering an EV, and 13% are thinking about installing battery storage in the next three years.
Such consumers present both a challenge and opportunity for utilities to modernize their services and in the process speed up the decarbonization of networks and digitalization, according to the study.
Greg Guthridge, EY Global Power & Utilities Customer Experience Transformation Leader, said with omnisumers, the “demand for simple, but sophisticated, end-to-end solutions and integrated experiences will become the new basis for effortless engagement.
“Those energy providers that rapidly develop a mature, yet simplified ecosystem, in which “omnisumers” can exchange value, will win in the market.”
The survey also revealed that consumers are mainly focused on three key areas including saving money, saving time and saving the planet. As such, the demands are pushing utilities into increasing investments in mechanisms such as energy efficiency and renewable energy.
As a result, energy firms are struggling with maintaining grid stability in efforts to provide baseload power using renewables. This is where the services of energy efficiency, storage and demand response technologies come into play, which are also presenting utilities with huge management challenges, according to the study.
Guthridge, added: “While consumers have turned their attention to sustainability, one size does not fit all. The messages and solutions from energy providers will require insights and tailored approaches aligned to the deeper motivations for each individual customer.”
EY also found that the COVID-19 pandemic has transformed consumers to be more energy sensitive.
Up to 64% of consumers who are working from home check their energy consumption at least once a month (12% higher than average), and 70% are interested in energy efficiency solutions (8% higher than average). This means utilities need to invest in solutions such as smart metering and prepayment, as well as tailor efficiency initiatives to meet consumer individual needs.
“The new generation of energy consumer is looking for options that provide transparency, flexibility and control — now is the time for energy providers to get creative,” said Guthridge.
The study also found that consumers now view digital services as the standard for utility operations with them demanding services such as grid automation and isolating to address power outages, as well as digital and online channels to address queries such as bills and outage reporting.
Find out more about the study.