Energy transition starts at home

Energy transitions and disruptions are nothing new. In the 80 years since EIC formed, the way we produce, transport and use energy has evolved dramatically.

The use of coal to drive steam power and thermal power plants, and to heat homes, grew from the 1930s to the 1950s. Oil leapt forward in the 1950s and 1960s as petrol-powered vehicles became more affordable and accessible. The slow expansion of natural gas pipelines through to the early 2000s, and the technological advances since then, have led to significant growth in shale gas during the past 20 years.

These transitions have characteristics in common – they have been relatively slow, more evolutionary than revolutionary, and impacts such as changes in the fuels used to generate energy were either somewhat unseen or felt in only very specific parts of consumers’ lives.

The energy crisis today has multiple dimensions

Now we are in the midst of another leap forward, but this energy transition is markedly different. The pace, scale, innovation and direct impact on consumers are unlike anything we have ever seen. Significant investments in clean energy, new transmission infrastructure and smart distribution networks are well underway, and the timeline for transformation is now just a couple of decades – or even less.

While many speculated that the current energy crisis in some nations would slow investment and create backsliding, the opposite appears to be true. The International Energy Agency’s forecast in its World Energy Outlook 2022 report shows demand for every fossil fuel peaking or plateauing during the next decade.

Omnisumers are on the rise as consumer confidence wanes

However, the most significant difference in this transition is the central role of consumers. In the coming years, the energy transition will hit home. Infrastructure such as wind farms and transmission lines will increasingly appear, solar panels will dominate the rooftops, more electric cars and bikes will be in garages, and new digital technologies will be installed in homes. And consumers will face an exponential increase in opportunities to shift their energy use and take advantage of greater choice, convenience and control, while also enhancing system flexibility and resilience. What it means to be an energy consumer is fundamentally changing, and we see the emergence of a new, more active and engaged energy omnisumer – a person or business that participates in a dynamic energy ecosystem across multiple places, solutions and providers.

The EY Energy transition consumer insights research of 70,000 consumers in 18 markets during the past two years found that they are not just ready for this change – they are leading the way. Rising prices and market disruption have fueled their interest in clean energy and in adopting new solutions such as electric vehicles and rooftop solar.

At the same time, volatility has taken a toll on consumer confidence in an industry that has been taken for granted for years. Since 2021, more than 80 energy providers have gone out of business in competitive markets and, across the world, US$550bn has been spent on government intervention to support consumers and providers. For consumers, this has raised concerns about affordability and equity, and caused them to question what their future energy experience will look like.

We are in the midst of another leap forward, but this energy transition is markedly different. The pace, scale, innovation and direct impact on consumers are unlike anything we have ever seen

Reinventing the energy experience

For energy providers and industry stakeholders, this is an urgent call to action. Energy consumers are accelerating their transition to the future, and now is the time to keep pace or risk being left behind. The key to success is to put consumers at the centre of the energy transition. And the place to start is by reinventing the energy experience.

EY’s survey results reveal that a key opportunity for providers to improve the consumer experience lies in new energy products and services. Consumer interest in a variety of new energy solutions – including renewable energy, rooftop solar, energy-efficient appliances, heat pumps, electric vehicles and charging – is growing. However, only 28% of consumers who were involved in a new energy product or service experience with their energy provider during the past year were highly satisfied. The problem is that adopting just one new product often requires consumers to deal with multiple parties, including a retail store or speciality provider to purchase it, a contractor or other organisation to install it, and government departments or energy providers to provide construction permits, process rebates or inspections.

This tedious, frustrating experience threatens to slow down the adoption of new energy products, and the energy transition itself – but providers can turn it around. Of consumers, 81% want their energy provider to play a role in their new energy product and service experience. This gives providers the opportunity to develop an omni-experience supported by a much deeper understanding of consumers, orchestrating a complex ecosystem and providing digital tools and channels of interaction that rival the likes of Amazon and Google.

Preparing for a consumer-centred energy future

Are energy providers up to the task of engaging and inspiring consumers to accelerate a better future for all of us? We believe so – if they invest now. A focus on six no-regrets strategic imperatives today will create the building blocks for tomorrow.

• Effortless engagement – reshape the energy experience by designing and delivering seamless journeys that span multiple energy providers, products and channels.
• Operational agility – create an internal culture of agility that is flexible and responsive to the inevitable surprises ahead. Build the ability to embrace challenges and capture opportunities at speed.
• Digital enablement – enable employees, partners, and consumers alike with intelligent digital platforms and tools that improve satisfaction and value.
• Adaptive workforce – engage and empower the energy workforce of the future with new operating models that recognise that the employee experience and customer experience go hand in hand.
• Innovative growth – create an innovation engine to monitor, test, learn and scale new opportunities that appeal to the emerging needs of increasingly diverse and demanding energy consumers.
• Sustainable enterprise – walk the talk around sustainability by turning the focus inward to the culture, operations and broader ESG focus to create value for consumers, communities and the organisation.

The truth is, if we could go back 80 years and time-travel the founders of EIC to today, they would largely recognise our energy system’s structures and operations. Eighty years from now, that is not going to be the case. The future holds abundant clean energy, mass electrification, diversification of energy sources and storage, and mass adoption of distributed energy resources. But more than anything, this transition will put consumers at the centre of a new energy world.

The future holds abundant clean energy, mass electrification, diversification of energy sources and storage, and mass adoption of distributed energy resources. But more than anything, this energy transition will put consumers at the centre of a new energy world

Image credit | Getty