As we emerge from the holiday season, the Retroficiency team has been reflecting on learnings from recent industry events. In December, we participated in three conferences: ACEEE Intelligent Efficiency, AESP Big Data Analytics Online Conference, and the Institute for Electric Innovation book launch of Key Trends Driving Change in the Electric Power Industry. Undoubtedly, a major area of discussion in all of these events was the profound ongoing evolution of the energy industry and the role that data analytics will take in enabling that transition.
Market thought leaders repeatedly aligned on two important themes in order for the industry to successfully navigate this new landscape: 1) know your customer and 2) implement the right regulatory frameworks.
1. KNOW YOUR CUSTOMER
The pace of change in this industry has been driven in part by the rising role of the customer. As the spectrum of customer choice expands, energy providers can no longer rely on generic offers and messages to the mass market. To deepen relationships and boost retention, they must understand their end customers – beyond who is simply paying the utility bill each month. They must recognize the needs of business owners, property managers and tenants, and be able to communicate how solutions like energy efficiency can help meet business objectives.
With new customer engagement platforms available on the market, energy providers can easily communicate personalized opportunities that appeal to different business stakeholders, significantly advancing their position in the eyes of the customer. Retroficiency’s solutions empower energy providers to continuously engage their customers in relevant insights about their energy consumption.
Utilities and industry stakeholders also need to undertake different approaches in order to convert more energy efficiency projects among disparate customer segments and energy conservation measures. Once a customer is interested in pursuing a project, there are a variety of data-driven methods that can be applied to streamline the process of closing projects and influence customer action. As discussed at ACEEE Intelligent Efficiency during a Retroficiency-moderated panel, Vermont Energy Investment Corporation was able to achieve this objective through continuous real-time tracking of measures and coaching, enabling industrial customers to evaluate performance over time and detect issues faster than before. For Con Edison in New York, the focus was on using analytics to scope out specific measures with customers, applying Retroficiency to define and implement energy efficiency projects.
2. REGULATION MUST KEEP UP WITH THE INDUSTRY
At the IEI conference, Rodger Smith, Senior Vice President and General Manager of Oracle Utilities challenged the energy industry to move beyond the 10/10 rule: what customers want are 10 years ahead of what their utility is providing, and what utilities are doing is 10 years ahead of where regulatory policy is. But this is no longer tenable. To succeed in the new energy future, regulators, utilities and industry stakeholders must work together on policies that consider the new dynamics of the market, especially regulatory frameworks that allow energy providers to respond quickly to customer behavior and needs.
Analytics can support this transition. Regulation must understand the latest analytics driving the market if it is going to create policies that align with this shifting industry. Below are two examples of how data analytics can uncover and inform new opportunities, discussed in particular at ACEEE and AESP:
- Market potential. Though widely used, market potential study efforts have traditionally been very rigid, focused on using benchmarks to extrapolate macro-level potential results. In order for energy efficiency programs to become more dynamic and capture new opportunities, regulators and utilities must more deeply and frequently understand the opportunities that exist. Analytics are helping innovative regulators and utilities understand potential more rapidly – building by building, sector by sector, and end use by end use.
- M&V. Once projects are underway, analytics-enabled M&V allows program administrators to quantify realized energy savings from energy conservation measures in a more scalable and cost-effective manner than traditional methods. Retroficiency has seen from its work with utility programs that automated M&V analytics can be a reliable way to track savings from low-cost operational measures, for example, and more effectively demonstrate the value of energy efficiency to program participants.
Whether you attended these conferences or not, we’d love to hear your thoughts on these points. Add your comments below or contact us today.
Cross-posted from the Retroficiency blog.