Is there a ‘big data’ future for energy suppliers?

Can energy companies take advantage of the opportunity that big data presents, or are they slow-acting incumbents that will be undercut? In the March 2016 issue of New Power, distributed at Future of Utilities, we took soundings

It has been decades since the utility industry started moving towards using ‘smart meters’ that would provide real-time data on domestic customer usage. Meanwhile, the world has moved on.

First, the infrastructure has changed – the connected world and big data make smart meters a much more powerful tool than was initially envisaged.

Second, customer attitudes are changing. Energy utilities have said for years that they would like to become ‘energy service companies’. But utilities may have to  think outside energy if they want to maintain a relationship with customers.

Do energy companies have a future? It may not be too late. The big six can garner little in the way of customer enthusiasm, but they and other energy suppliers are seen as reliable. New Power asked five companies working with ‘big data’ – Bidgely, Onzo, Teradata, Junifer and Autogrid – whether energy com- panies can dig deeper into the customer information they already have, and use it to build a closer relationship – and where their competition may come from. This is what they said:

1: What ‘big data’ do utilities already have that they are not using to full effect, and how can they use it to improve the customer relationship?
Summary: utilities can mine their data, but they have not made the connection with external information. Nor can their systems take advantage of big data.

“Historical consumption data is a valuable ‘big data’ resource that can be leveraged by utilities to understand many aspects of consumer usage, such as opportunities for efficiency, appliance anomalies, impact of weather on HVAC usage, etc. The analysis of that data, along with other easily accessed data such as weather, enables utilities to help consumers save money, energy, achieve greater peace of mind, and infer if things are happening, or not happening, within their homes.” – Bidgely

“The data and technology that utilities need to give their customers a personal experience is already available through the goldmine of data they are currently sitting on. Imagine the loyalty built through warning customers of potential “bill shock” before high bills become a problem.” – Onzo

“Considering the minimal information available, it should be straightforward for energy companies to provide that simple data to customers in a meaningful way. It does not bode well for the future if there is such difficulty at the moment without the added complexity of big data.” – Junifer

“There’s plenty of good old-fashioned data that utilities are not using to full effect. Most don’t have a single view of a customer across CRM [customer relationship management], billing, trouble tickets, metering, etc, and now they’re creating new data silos as smart meters are rolled out.” – Teradata

2: How can utilities show that customers can benefit from sharing their data and that concerns over security and privacy are misplaced?
Summary: utilities must make sure their security and privacy policies are clear. But most importantly they must offer services that are ‘worth it’ for customers, and give them an immediate return on the decision to open their data.

“The view of the ‘concerned citizen’ seems to be that energy consumption can provide a view of a customer’s lifestyle profile and therefore can be used to monitor when properties will be vacant. The same view could be held for broadband services, only to a greater extent as broadband is generally only consumed when people are present in the property, whereas energy can be consumed even when the property is vacant.” – Junifer

“Energy data from the home is viewed in a similar light to location data from apps back in the day. Where once consumers were angst-ridden about service providers knowing their location, today it barely registers on their consciousness that Google, Apple, Instagram, Twitter and many more know where they are 24/7 within a 3m radius.” – Bidgely

“Think Gmail – it’s pretty common knowledge that our email is ‘read’ – for example, we see ads targeted to us based on what was in our mail. But Gmail is such a great interface, with such good spam prevention, and genu- inely useful new features, that many users sacrifice some privacy to use the service… plus the added benefit of less irrelevant marketing directed at them.” – Onzo

“[Utilities] can also create new business programs, in which they alert their customers if the air-conditioning system in a building is going to break, if an appliance in a customer’s home is inefficient or if there are other problems with their customers’ energy equipment.” – Autogrid

“Advanced users of big data in the wider retail space could just as easily move into this new space by accessing, and better using, the same data that utilities will hope to use… their experience and capabilities will give them the advantage over the dinosaur utilities they wish to take business from.” – Teradata

3: What (non-utility) sectors are furthest ahead in taking advantage of ‘big data’ and the ‘Internet of Things’ (IoT)? When will they step into the utility space?
Summary: the space will be wide open for new entrants and they have better customer relationships than utilities. But utilities can use their first-mover advantage and they may be able to leverage that. It is an opportunity, as well as a threat.

“I would expect that telecoms companies would look to enter the gas and electricity space at some point in the future as their experience in dealing with ‘big data’ and presenting this to their customer base in a meaningful way would enable them to provide real immediate value.” – Junifer

“There is a general perception that the telecommunications, financial and retail sectors have been at the fore- front in taking advantage of big data and the Internet of Things. However, the reality is that utilities are seeing the adoption of industrial IoT devices at a faster rate than any other industry sector. When it comes to actual projects and use cases, it is energy use cases that have been best able to demonstrate and deliver significant return on investment to both customers and service providers, and these are the projects that are ultimately getting funded. This has provided the utility industry with a first-mover advantage.” – Autogrid

“Tech companies like Google, Apple and Amazon, as well as providers like Comcast mobile carriers, could all conceivably enter the energy space. However, none have any connection within the home (except Nest), and none have expertise to understand energy usage without instrumenting or replacing existing devices such as furnaces, water heaters, etc. However, fitness wearables, such as Fitbit and Jawbone, are a growing sector for big data and IoT that we believe show a way for utilities to really engage consumers for the first time. The quantified-self movement now applies to energy efficiency.” – Bidgely

“There are multiple sectors and companies eyeing the utility industry for its wealth of customers and data. This represents a huge opportunity for utilities. We believe the ability to offer other products such as targeted insurance and online retail services will be a reality – simply because the economics and value to be gained will be too attractive to the industry to ignore.” – Onzo

 

Read more on this topic:

Energy retailers – how are they changing?

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1 comment for “Is there a ‘big data’ future for energy suppliers?

  1. Janet Wood
    May 10, 2018 at 8:45 AM

    Read more about how big data can be used in the supply chain here http://atonce.be/blog/how-big-data-is-shaping-the-supply-chains-of-tomorrow/

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