Transforming strategies in the new energy landscape


Once a commodity-based business, today’s energy supplier also offers an increasing range of non-commodity products such as insurance, electric vehicle (EV) charging and connected home services. They are working smarter and faster to engage customers, protect margins and stay competitive, whether its faster quote-to-contract turnarounds or packages that optimise commercial customers’ resource portfolios. Panellists on the Future of Utilities’ webinar, Transforming Strategies in The New Energy Landscape, agreed that whether it’s the impact of looming regulation or the COVID-19 pandemic, energy companies are harnessing new technologies, forging new partnerships and engaging with customers as never before to adapt to this fast-changing world.

The transition to a carbon-neutral world is a massive disruption for energy companies, which must accommodate the rise of distributed renewables and self-generation, carbon capture and storage technologies and electric vehicle charging. “From an energy company point of view, energy service products are becoming much more complex,” said Bjoern Reinke, Director of Data & Data Science at Drax Retail.

“All aspects of our business are under attack from more nimble, agile, smaller companies.”

Jonathan Tudor, Centrica Innovations

It’s not just decarbonisation that is piling on the pressure. “All aspects of our business are under attack from more nimble, agile, smaller companies,” said Jonathan Tudor, Director of Technology & Innovation Strategy at Centrica Innovations. “But we can learn from them as well.”

He pointed out that one of the biggest changes is how customers think about energy and engage with their suppliers. “That’s the underlying disruption we are starting to incorporate into everything we are doing right now,” he said.

“Customers have more power than they ever had before.”

Kelly James, Vlocity

Kelly James, Vice President and General Manager at Vlocity Energy & Utilities, agreed. “Customers have more power than they ever had before,” she said “They have more complex questions, whether it’s cost savings, energy savings or zero-carbon deadlines. Suppliers are looking to rise to this challenge with tailored answers to those questions and to be really good advisors to their customers. That means expanding their scope beyond a commodity supplier to data and information services.”

“You have to know what’s top of the customer’s agenda, whether that’s decarbonisation or price,” said Lizzie Hieron of Social Energy. “But you have to do it all, the right price and the right service and do it all in a competitive package. You cannot hide behind one element anymore, all of them have to meet the customer’s demands.”

Meeting the demands of the empowered consumer will only intensify as the energy transition intensifies. In the UK, for example, from 2025 no new residential property will be able to connect to the gas grid, with developers instead installing low-carbon heating such as heat pumps. “How will that experience be different for the consumer?” asked Jonathan Tudor of Centrica. “There’s a whole engagement piece to go along with that.”

Innovation: anticipating new needs

The rise of the empowered consumer, the emergence of agile new entrants and the acceleration of the decarbonisation agenda mean traditional energy suppliers are having to work and think very differently. It means putting the customer front and centre of everything you do, said Jonathon Tudor of Centrica while Kelly James of Vlocity stressed the need to be able to “change at pace” in order to stay relevant to today’s customer.

“Speed matters and it takes a mindset shift.”

Kelly James, Vlocity

“Speed matters,” said James. “And it takes a mindset shift. These are complicated equations with so many factors, including market pricing, demand, customer profiles and previous contractual arrangements. Historically this has been slowed down by rigid systems, rigid processes and even rigid ways of thinking but it’s now possible to change an offering very quickly, pulling in new insights surfaced from other systems or extending new offerings that are tangential to the core commodity. For one of our customers in the UK, for example, something that took three to five days to generate a personalised offer to a customer can now be done in three minutes.”

“We partnered with a small start-up Driivz that already had the end-to-end software to create that seamless user experience more quickly.”

Jonathan Tudor, Centrica Innovations

“That was us!” said Jonathan Tudor of Centrica. He said the first step in this journey is to “understand what a customer needs and wants, the capabilities that will be required to deliver that at speed and whether that can be done best through a partnership or inhouse.”

It’s important, our panellists agreed, not to reinvent the wheel; there simply isn’t time if suppliers want to get offers to market quickly.

“With electric vehicles, the charging experience isn’t great at present,” said Jonathan Tudor. “We see a future where you can roam like you do with your mobile phone so we partnered with a small start-up in Israel, Driivz, that had the end-to-end software to create that seamless user experience. There was no point us trying to build something like that for ourselves when it already existed. This way we could get there quickly to create that more powerful proposition for the customer.”

For traditional suppliers, the concept of commodity versus non-commodity can be unhelpful.

“Customers don’t think like that,” pointed out Kelly James of Vlocity. “For them, it’s all about solving a problem and helping them meet their goals. Utility companies do much more than supply a commodity, some are among the biggest suppliers of insurance and maintenance services and they now also do smart homes and automation. It’s a bit easier to protect margins when you think in this holistic way.”

Putting the customer first

Companies are looking at market leaders in other industries, such as Netflix to Amazon, to find inspiration for new customer experiences and solutions. It’s important, said Jonathan Tudor, to look ahead and try to predict the future and what might be important to people in the coming years.

“You have to make sure your customer and their needs are at the front of your decision-making.”

Lizzie Hieron, Social Energy

Lizzie Hieron of Social Energy agreed. “You have to make sure your customer and their needs are at the front of your decision-making,” she said. “We could see solar and battery installs were less effective with the end of the feed-in tariff so it was finding a niche where we could add value to something the customer was looking for.”

From social media to AI-powered predictive analytics, technology now offers lots of ways to understand and predict customer behaviours – but the human touch is still relevant.  “You can’t beat meeting stakeholders and customers, having that rich conversation and reflecting on the choice of word and the energy in the room,” said Bjoern Reinke of Drax Retail. “Nothing beats that, especially when combined with market analysis and customer sentiment analysis.”

Regulation: a stimulus for innovation?

Regulation is often criticised as a barrier to innovation yet our panellists felt it could actually act as a stimulus.

“Ofgem allows us to experiment but there are guard rails in place to make sure it’s done appropriately.”

Jonathan Tudor, Centrica Innovations

“Ofgem allows us to experiment but there are guard rails in place to make sure it’s done appropriately,” noted Jonathan Tudor of Centrica. Answering a question from the audience, he pointed out that the price cap adds regulatory pressure but can also be a stimulus for creativity.”

“The setting of the 2050 target and the investment into the charging grid are country-changing interventions that will make the country a better place. Whenever there’s fundamental stimulus of this kind, energy companies will respond.”

Bjoern Reinke, Drax Retail

“The price cap is one intervention but there are so many encouraging interventions that have happened and allowed us to broaden our minds,” added Bjoern Reinke of Drax Retail. “The setting of the 2050 target and the investment into the charging grid are country-changing interventions that will make the country a better place. Whenever there’s fundamental stimulus of this kind, energy companies will respond to that, and in fact are probably working on them already.”

Inevitably the conversation turned to the current COVID-19 crisis, with this purely digital webinar hosting panellists from around the world. Companies have been quick to make sure employees are safeguarded, working from home where possible and some offers that require at-home visits are reconfigured to be available online.

“We have seen utilities quickly make the shift to working from home with their contact centres and digital self-serve channels,” said Kelly James of Vlocity. “With more people on the phone we are seeing an immediate uptake of chatbots to give contact centre staff more time to provide support and comfort for those that need it.” 

She pointed out that the transforming energy landscape will be a blend of technology and human skills. “It’s one thing to have the data, it’s another to make it useful,” she said, stressing the need for systems that can “pull together a variety of data and analysis from different sources and make it accessible to all employees across the organisation.”

It was a strong conclusion to a fascinating discussion about the future of energy supply in a changing world – set against the backdrop of a much-changed and interrupted world.