As traditional business models are being disrupted by new technologies and new customer service models, utilities are being warned to adapt or risk losing their customers.
As traditional business models are being disrupted by new technologies and new customer service models, utilities are being warned to adapt or risk losing their customers.
Here in New Zealand the Green Grid project provides the best data on how kiwi's view their electricity providers. In their survey. PV Uptake in NZ- The Story so far, respondents named distrust in their electricity provider as one of the chief reasons New Zealander's wanted to install solar.
The challenge for utilities on both sides of the ditch is to react fast-enough to the many new options becoming available to consumers everyday. Solar plus storage, more options to switch providers than ever before, peer-to-peer electricity networks, and a host of other other options available to the connected and engaged prosumer means change is inevitable and those that don't adapt risk being left behind.
he reputation of the energy industry is under stress across the globe – particularly as incumbent fossil fuel industries resist the fight against climate change – but in some countries such as the Australia, the UK, Brazil and South Africa, the situation is acute.
A major new survey by IPSOS-Mori in the UK says the “favourability” of the energy industry falls into negative territory compared to other sectors in about one third of the countries surveyed.
In Australia, just 22 per cent have a favourable view of the energy industry, compared with an average 28 per cent for other sectors such as banking, airlines, cars, chemicals, beers, sweets, fast food, insurance, and media. That gives Australia’s energy industry a negative ranking of mi us 6 per cent. Only the UK and South Africa fared worse.
IPSOS-Mori blames the poor ranking in Australia on gas supply issues, presumably also coal seam gas, and the collapse in large scale renewables investment, which has undermined confidence in the energy industry.
Presumably that also applies to the small scale market, where the conventional business models are already under stress because of the high cost of electricity, particularly grid charges, and the opportunities being afforded by rooftop solar and battery storage.
That is requiring energy utilities to learn how to bring their business beyond the metre and inside the household. That is not as easy as it might sound.
In 2010, a study from Ernst & Young showed electricity retailers were not skilled at customer service. There was little interchange with the customers, and if there was, it was sparked by complaints around blackouts and connections.
The report noted that, with the deployment of new technologies, power and utilities companies will come under competitive attack all along the value chain, as new interactive customer relationships and new competitive models allow third parties to enter the market.
The incumbents can choose either to evolve, or face a revolution where “market rationalities and business strategies change completely”. This was a theme picked up by the CSIRO in its two reports on the future grid, where it warned that if conventional utilities did not evolve, then one third of customers could desert them altogether.
That option is fast approaching as the cost of new technologies falls, and utilities react to defend their earnings by jacking up fixed network charges and choosing tariff options that seek to make these technologies less attractive.
You can read the full article on One Step Off The Grid here.
