Most UK energy suppliers looking to use data from smart meters to boost opportunities, innovation and diversification, finds research by Capgemini
Increasing amounts of detailed energy use data captured through the smart meter rollout is prompting energy suppliers to explore a range of new business opportunities, according to research by Capgemini.
Based on 50 interviews with the executives at the 'Big Six' and a number of 'challenger' energy suppliers, the study found a consensus across the sector that the market will be "completely turned on its head" by a host of digital transformations and the wider clean energy transition over the next five years.
A raft of disruptions to the UK energy sector are expected in the coming years, with flexibility services, electric vehicles, battery storage, local generation, and increasing renewables capacity all expected to help decarbonise the industry and boost green business opportunities.
But the pivotal driver for the impending transformation is the government's smart meter rollout, according to 84 per cent of those interviewed.
The government has set a goal to install a smart meter in every home and small business by 2020 in order to boost energy saving efforts and deliver richer energy data to suppliers.
The roll out has faced criticism from some quarters over the cost of the programme and technical difficulties that have fuelled concerns that smart meters may have to be switched when households change suppliers.
However, energy industry execs are optimistic the access to more granular energy use data will help lower costs and enable the development of a range of new services for customers. They also downplayed concerns the sector could be overwhelmed by the sheer quantity of data that will result from universal smart meter deployment.
More than three quarters - 78 per cent - of those interviewed for the Capgemini report said they felt well equipped to handle the expected influx of data, while 70 per cent have already implemented innovative technologies aimed at managing and using it effectively.
The research also provided more details on the opportunities from digitisation that suppliers expecte to see. Eighty-four per cent of respondents have identified or plan to identify new business opportunities related to smart meter data, of which 84 per cent are already pursuing a plan to capture these opportunities, the research found.
Moreover, over half - 52 per cent - are looking beyond their current value chain to find alternative revenue streams, prompting a significant shift in business models, and approaches to innovation and collaboration, Capgemini said.
"Data is the lifeblood of today's innovation, so the fact that the government has provided a mandatory stimulus to increase it within the energy market will prove a huge boon to the industry," explained Alain Bollack, vice president at Capgemini. "It is paramount that energy providers take full advantage of this, and while they will continue to improve customer experience and services with it, looking beyond their immediate boundaries for integration with other markets will also open new doors for both companies and customers alike."
One particular future trend identified by the research is collaboration, with 71 per cent of those interviewed currently or planning to work with other companies from across different sectors to seize new business opportunities from smart meters and the greater capture of digital data.
"The retail energy market is in the midst of unprecedented, significant and enduring change," added Bollack. "To respond to these pressures, energy suppliers are working hard to re-evaluate their business models and break down barriers to innovation. Faced with massive external forces, attitudes to collaboration are surely shifting within the industry, with the opportunities it affords quickly becoming too evident to ignore."
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