Consumer energy resources are fundamental to reaching 82 per cent renewables. But as the grid changes, how can utilities build trust with communities as partners in the energy transition?
Australia’s energy retailers and network operators are leading the charge towards net zero, but they’re tasked with delivering more than just renewable energy; they’re building an equitable, resilient and lower-cost energy system that is designed to leave no one behind.
None of this can happen without community support but, according to EXL Global Head, Energy, Utilities & Infrastructure, Mitch Donnelly, consumer trust has eroded over time.
When the power is on, no one sees all the hard work that the generators, distributors and retailers put in to keep the grid running – but when the power is out, everyone is paying attention.
“I think consumer trust is largely eroded because of consistent bad news stories,” Mr Donnelly said
Mr Donnelly said that it’s important for consumers to see that utilities are there ultimately to serve them, and to trust that the energy sector has their best interests at heart.
“We need to start having a more honest conversation as retailers and network operators with consumers about the role that we play, about what we do, why we do it, and bring them into the community,” he said.
“And, most importantly, we cannot leave communities behind – whether they’re rural communities, whether they’re First Nations communities, or any communities who traditionally have been excluded from the energy dream.
“We’ve made great investments into the future and into reinforcing the network, and it’s incredibly important to look at how we manage the grid going forward and move towards net zero.
“What we’re not doing is showing consumers what they get in this.”
According to Mr Donnelly, this transition is a chance to create an energy system that is more reliable, fairer and more affordable – and one in which customers can easily participate.
“Australia has the resources to be an energy-independent nation to manage its own pricing for the benefit of its citizens. That relies on this transition,” he said. “That means in 2030 customers have access to low-cost solar and battery storage, but they are also empowered to navigate a complicated energy market in a way that meets their needs.
“But we’re not asking them to do this as a part-time job. That shouldn’t be a challenge that customers have to face, it should be something that can be done for them – and it can actually be done through AI and data that energy retailers provide.”
Information overdrive
Australia’s uptake of rooftop solar is among the highest in the world, and Mr Donnelly said that embracing consumer energy resources (CER) gives customers agency and control over their power bills.
“There are some really active ‘prosumers’ in Australia. They’re tech savvy and they want to make choices and be engaged in energy. But the vast majority of customers want energy to be a silent service, they don’t want it to make their lives more difficult,” he said.
“And this is where we run the risk – the more complexity we add into the market, we need to look at how we simplify things for consumers that have invested into CER. It shouldn’t become a burden for them.”
According to Mr Donnelly, Australia’s energy markets are some of the most complicated in the word. Not only does the country have three entirely disconnected energy markets, but Australians also have to navigate complicated tariff arrangements, as well as pricing offers, rebates and structures that differ depending on where you live.
“We have all of this level of complexity that needs to be simplified. We need to start meeting customers where they are, personalise their journeys, help them understand what they are getting, what are they paying, and how they can manage it,” Mr Donnelly said.
EXL Vice President – Australia and New Zealand, Samit Gayen, explained that around 90 per cent of Australians live in Victoria, New South Wales, Queensland, South Australia and Tasmania and buy their electricity through the National Electricity Market (NEM).
Of the remaining ten per cent, the majority live in Western Australia and their electricity comes from the Wholesale Electricity Market (WEM), which is largest standalone electricity grid in the world. The last one per cent Australians are hooked up to the Northern Territory Electricity Market (NTEM), which again has its own set of regulations and rules.
“What people across the world don’t really know is we have three markets in the same country – I don’t even think many Australians know that as well,” he said.
“But ten per cent of consumers in this country have a separate way of selling electricity, the way measure outcomes and service customers is different across these markets. Since the discovery of AC and DC alternating current more than 100 years ago, the grid has
operated largely the same way.
“But as we transition towards a sustainable, renewable future, we’re taking a leap of faith into new technology that doesn’t have a century of historical data to leverage.
“We have to transition, but the transition needs to be in a considered manner, and to understand how we take that journey it’s important to have data and analytics, because that’s how you’re going to be able to predict the future.”
Mr Donnelly said it’s vital that we take a purposeful approach and focus on what’s important.
“Customers don’t all want masses of data. They want simple things that work, simple service that’s effective, simple solutions that meet their need,” he said.
For Mr Donnelly, it’s about understanding how data is used and who it serves.
“In the energy market, we have more data than we’ve ever had in the past. We have sensors, we have smart meters, we have AMI we have all of these insights into what customers are doing, but we’re drowning in that data,” he said.
“Finding meaningful insight from that data becomes a real challenge, so we need to focus on the things that are important to us as a market and things that are important to consumers.”
Everyone can be part of the energy dream
According to Mr Gayen, there are three key actions retailers can take help build customer trust.
“The first part is transparency around usage data, but the second part is then proactively sharing that data with the customer,” he said.
“If they’re using too much energy washing dishes in the day and that there’s a better time of the day they could do it, we can share that information proactively. [For example], in the email with their bill, you can [give the customer] three points on how they can save energy.
“The third area where [retailers] can build trust boils down to transparency around the pricing mechanisms and supporting customers struggling to pay bills.”
Mr Donelly said some international markets are already using consumer data to personalise messages.
“We can use consumers’ data to put them on the best deal because they’re experiencing [serious hardship],” he said.
Mr Gayen said the first step is identifying vulnerable customers.
“One thing we need to be conscious of is that people don’t open up on the first instance. We try our best to hold on for as long as we can before we put the plug and say we’re really struggling to pay,” he said
“That’s where the power of data and AI comes in, and today there are intelligent solutions that can be deployed to identify a vulnerable customer at a very early stage.
“At EXL, we use an algorithm that can pick up the customer’s tone and their choice of words to identify that they might be going through a challenging time.
“You can even use customer behaviour for this – if someone has a payment plan put in and then that person breaks that promise and doesn’t pay on [the agreed] date, then that is a trigger event [that shows] the customer is going through a difficult time.”
The next stage is working with that customer to help them navigate that hardship.
“Once we’ve established that they’re [experiencing hardship], we can then reach out to the customer proactively, before they reach out to us,” Mr Gayen said.
“Again, it’s about building trust. Instead of [the customer] calling me and then I assess them, let’s do it the other way.
“If [tell them] I’ve already assessed them, [offer to] put them into a hardship program and then work with them to come up with a plan that works for them, then we can drive a much better outcome for the customer.”
Mr Donnelly said it’s important not to leave rural and remote communities out of the conversation.
“For rural customers, there’s a perception that investments into the network aren’t going to benefit them – [they see] the whole market as designed to benefit the metropolitan [areas],” Mr Donnelly said.
“Government regulating the market is good for government perception with the public, but it builds trust in government, not in suppliers and network operators,
“I think there needs to be a bottom-up approach from grid providers and from network operators to engage with communities. This means getting out and talking to people to encourage participation and engagement. And a lot of that is about face-to-face engagement and enabling rural communities to get together collectively into community energy projects.
“This is something we see in the US quite a lot. I talk to consumers who are out in the Midwest [states] and they feel completely detached from the metropolitans sitting on the two coasts. What some parts of the US do very well is community energy projects that give ownership back to those rural communities.”
“We can [also] use data to give them a genuine journey that makes them feel valued as a customer,” he said.
Mr Donnelly said not only do retailers, networks operators and government need to work together to deliver Australia’s energy future; they also need to collaborate with other sectors and look to learn from the challenges that other nations have already faced.
“It’s so important to bring in those external, different perspectives, because this is a transition and we need to start looking externally at what happens here, what happens in different market,” he said.
“This is not a reshaping of what we have. This is this is a revolution, not an evolution.”
For more information, visit www.exlservice.com
