Carbon neutrality and related net-zero pledges are not new to utility companies. Most of them have had corporate strategies to meet climate imperatives in place for a while, and long before COP26. These companies are deeply invested in diversifying their energy sources, embracing energy efficiency, evolving their business models, and fully transitioning. They are leading by example.
At the same time, utilities and energy suppliers play a critical role in the net-zero economy as they are also enablers for their customers’ (commercial, industrial, and residential) own decarbonization targets. Consumers themselves are realizing that the way they use energy is proving to be unsustainable. They are actively seeking to be part of the solution and to be more engaged, which is increasingly possible as everything becomes more interconnected. Digital creates a foundation to empower the customer to become part of the change.
In a recent IDC Energy Insights survey, 41% of European utilities identified sustainability and risk management as one of their top strategic business priorities. Among these utilities, 55% identified energy efficiency as the key initiative they are implementing to execute on their strategic business priorities.
At the same time, European energy suppliers identified product and service innovation as their top strategic priority, with 55% of them identifying energy efficiency and energy as a service for C&I customers as key initiatives.
The common theme is energy efficiency, which remains a cornerstone of reaching carbon neutrality. According to the IEA, “Net zero by 2050 hinges on a global push to increase energy efficiency.” Optimizing energy consumption entails understanding how energy is consumed, and then taking action. Providing personalized insights is critical for meaningful customer engagement. No one is in a better position to do so than utilities that are already measuring and quantifying energy usage. As an example, 91% of TEPCO customers find Bidgely Home Energy Reports useful or very useful, and 66% have followed UtilityAI-informed rate plan recommendations, reinforcing deeper customer engagement. Considering the challenging market conditions for utilities and energy suppliers, they need to make capital out of AMI data by extracting value through data analysis and insights.
With energy analytics, utilities can have a more targeted approach when it comes to identifying which customers would best respond to time of use tariffs; tied to the detection of electric vehicles, this can unleash significant benefits in terms of flexibility along the entire utility value chain.
Energy analytics can also provide unique information on which customers have a higher propensity to buy specific products. Additional energy disaggregation can also offer customers valuable information about their appliances. This information, tied to an energy marketplace, can become a concrete revenue stream for energy suppliers that have been struggling with cash flow for years. In fact, energy efficiency initiatives are a key tool for energy suppliers to mitigate the impact of rising wholesale energy prices on their bottom lines.
When it comes to net zero, utilities need to charge beyond their own journeys. There are myriad opportunities for utilities to reinvent themselves as energy (efficiency) advisors, creating long-term value for both themselves and their customers.
For more industry insights from IDC, download their latest IDC MarketScape: Worldwide Digital Customer Engagement Solutions for Utilities 2021 Vendor Assessment (IDC # US46149620, June 2021).
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