Putting customers in control

Smart meters will give us all greater visibility of our energy use, and what this is costing us – and with that knowledge, comes power. Understanding consumption will make us think about production.

Our vision at Good Energy has always been one of helping the UK move towards a decarbonised energy future, where we are no longer reliant on imports of fossil fuels and have our own secure, home-grown electricity supplies from renewable sources.
Regardless of where you stand on the debate about climate, it surely makes sense for the UK to take the opportunity of becoming energy self-sufficient, and finding “cleaner”, more sustainable ways of doing so.
We think companies like ours have a role, and indeed, a responsibility, in helping the UK on that journey. That also means we need to find better ways of drawing consumers back into the centre of the energy circle: the energy market should be about and for them.
We know that customers are becoming much smarter in their approach to energy. They’ve been bombarded in recent months by an almost constant stream of media and political discussion about rising gas and electricity prices, much of which has been focused on the “big six”. The result has been that many consumers have voted with their feet and switched supplier, with smaller suppliers like us often being the beneficiaries.
You only have to look at the recent Energy UK figures to see that around 1.3 million customers switched in the last quarter of 2013 alone. So it’s not unreasonable to expect savvy consumers to continue to keep a close eye on their energy bills.
This is where smart meters come into the picture. Given we believe it’s important both to move towards a decarbonised energy world and to keep customers at heart of the energy market, smart metering is a tool that can help reduce energy usage in individual households.
Due to be rolled out from autumn 2015, planning is well under way. It’s fair to say that the programme has been subject to a certain amount of debate, particularly on implementation for smaller suppliers, but while there are certainly some areas where more discussion is needed, my view is smart meters have much to offer.
Put simply, smart meters will put customers in control. These pieces of digital technology will give us all greater visibility of our energy use, and what this is costing us – and with that knowledge, comes power.
Not only will smart meters enable consumers to make better decisions about the appliances they use, for how long, and when, they’ll also be more conscious of potential energy efficiencies when they go shopping for new or replacement appliances (energy saving ratings will become much more meaningful to people).
At the same time, this could set the stage for energy suppliers to offer different tariffs that reward customers for shifting their energy use to times of day when it is plentiful.
But we will need to engage consumers and help them to see the benefits. They will naturally have questions – for example, about data accuracy and security – and these are areas we need to address.
We also need to find better ways of keeping tariffs to a minimum (suppliers are currently constrained to offering no more than four) while making sure we’re able to offer what’s best for the consumer.
For example, the Retail Market Review has obliged suppliers to tell their customers which tariff offers the cheapest option. This is fine as far as it goes, but ideally, we need to know what that customer’s individual pattern of usage is and what behavioural changes they are willing to make, to effectively advise them what is best for them. As smart meters will allow us to see this level of detail, we need to think about these conversations, because it will not be as simple as comparing unit rates.
Further, we must make it easy for all consumers to experience the same level of engagement. While some are already making choices based on more than price alone, others are not. Many of our customers at Good Energy, for example, are attracted not only by our competitive pricing, but also by our top-rated customer service, our renewable electricity sourcing and longer-term plans to help the UK towards energy security – not everyone is able to experience the same level of engagement.
Therefore, developing communications that help everyone to understand and appreciate the benefits and the “what’s in it for me” factors are clearly going to be an important strand of the work that needs to be done if the rollout is going to proceed smoothly and efficiently.
There’s also great potential here for finding ways of working with the many manufacturers who hold the key to designing and marketing more energy-efficient equipment. There’s been much written in recent months about the need to “design in” resource efficiency as part of the move towards a more circular economy. The smart metering programme presents another compelling reason – opportunity! – to make appliances “smart”.
So there is clearly still much to bottom out if we’re going to get the most out of this opportunity – keeping consumers’ interests at the heart of the programme while effectively delivering a clear route towards achieving our decarbonisation goals. At the same time, there’s a need to deliver solutions that are not too costly for either suppliers or consumers.
Significant challenges, yes, but smart meters are undoubtedly an integral part of the wider decarbonisation solution.
We believe that if we can use smart meters to help customers understand their energy consumption, then they can begin to think about its production. This technology can provide a tangible way for consumers to “own” their energy usage.
We believe this is all to the good.
But as energy suppliers, we have to realise at the same time that a successful rollout of smart meters will not be simply a case of “job done”, but the laying of the foundations for a reset of the relationship between suppliers and their customers. And thereby starts another journey!