What is the Future for Utilities?

What is the future for utilities according to those who are shaping it? What are the big talking points and what is important for the sector right now and looking ahead?

Having played a vital role during the covid lockdown, the utilities sector had to respond to lower demand and take a more strategic approach to its business model. Yet, a far bigger, more impactful setback was lurking in the wings. The war on Ukraine highlighted that our reliance on the global market for energy is no longer sustainable, especially given the increased pressure that climate change and population growth has already placed on the industry. The energy crisis has taken hold, as part of a wider cost of living crisis that has seen customers look to cut their energy usage and costs. How can the sector utilise this increase in public interest to its advantage and better engage with its customers?

It has had to reassess its resilience and preparedness for another unprecedented crisis and is urgently rethinking its approach to customer service. While digitalisation was already on the menu for most companies, recent events have accelerated these conversations, as they acknowledge their customers are seeking more transparency in interactions with them and are more informed than ever before. This is an opportunity to demonstrate credibility, and create more trust while energy is high in the public consciousness and customers are keen to engage.

The industry has already found new ways to engage with their clients through active education around energy efficiency, but now has the chance to build on this proactivity and innovation to transform their customers’ experience. Companies need to use the real time data on offer to discover trends and monitor performance, and let technology identify and resolve problems quickly. Doing so improves the end to end customer experience, even more so if developments are shared with the customer to make them part of this journey.

Companies therefore need to modify the way they engage with their customers and build systems that will assist in this transformation. This is not an easy task as introducing technology that they have not used before, and that their teams aren’t used to working with, brings new challenges, and takes a more specialised skill set. On the one hand, having systems that collect customer data can offer companies an opportunity to personalise their engagement with them, but on the other, managing the amount of data being collected involves an urgent need for enhanced security and to tackle where the customer journey remains broken. 

The net zero grid of the future relies on sharing data and intelligence, of customers and assets. Taking a common approach to crisis management and on shared pain points will keep the customer at the centre and protect those most vulnerable. As the industry becomes more open to the use of technology to collect and optimise real time data; as successfully demonstrated by South West Water in their use of satellite and drone technology to identify previously undetectable leaks; they position themselves as better prepared for the challenges of tomorrow, and more likely to prevent catastrophic disasters. 

The industry recognises the importance of tearing down silos between the different energy sectors in order to further collaboration. Working together has been shown to benefit both the efficiency of brands’ work and also their customers, so it makes sense to embrace this model of working. Understanding the complexities between water, power, communications, and transport, and how climate change and weather events can impact them is key to providing a resilient service. Good collaboration, and exploring and connecting to the existing eco-system allows for coordinated planning, drives down costs, and moves closer towards their net zero target.

Companies that act as intermediaries and work with their customers towards more sustainable and efficient energy use are more likely to succeed. A great example can be found in the collaborative work that Water Scan and the Carbon Disclosure Project, alongside companies like Greene King, are doing to aggressively drive down their water consumption and increase their water efficiency through sharing knowledge and data. Businesses that also collaborate with each other can gain an improved understanding of their customers, build more personal relationships with them, and better recognise their needs.  Ofgem and Ofwat have encouraged the sectors to work together across territories, so that they can identify vulnerable customers, where they are, and what their needs may be (UK Regulators Network report: Making better use of data identifying customers in vulnerable situations). This is vital to ensure that these customers are informed and aware of the support available to them as they face unparalleled cost increases. The industry responded to an Ofgem review that highlighted weaknesses in supporting these customers, with assurances that they “will continue to look at all the ways they can make sure people get the help and support they need”. (Energy UK)

The future for utilities as it pushes for net zero is in tackling the energy trilemma: affordability, sustainability, and reliability. Encouraging their customers to collaborate with them to achieve net zero targets through home-grown energy production that moves us away from a dependence on the global market, is more economical and supports the low-carbon market of the future. 

Digitalising energy will empower customers, reduce usage, drive down costs, and increase customer satisfaction. As energy becomes more self-sufficient, it needs to become more inclusive and accessible to all users. If the industry can get the basics right, innovate under pressure, develop products that anticipate needs, and be dynamic and collaborative with each other and its customers, meeting net zero targets and improved sustainability, reliability and affordability should be achievable.

CI&T