Utility Consumer of the Future
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An overview of the utility landscape, looking at trends and recommendations around the utility consumer of the future.
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Utility Consumer of the Future
- 1. THE CONSUMER OF THE FUTURE Consumer of the Future Sarah Klauer (Utility)
- 2. Topics We’ll Cover Today: • The Problem Space • Consumer Demographics • Trends • The Players • Leverage Points Consumer of the Future Sarah Klauer
- 4. Consumer of the Future Sarah Klauer
- 5. How does the consumer / utility relationship look in the future? Consumer of the Future Sarah Klauer …and how can we influence that future?
- 6. Not your Grandma’s utility. Consumer of the Future Sarah Klauer XYZ Power
- 8. Consumer of the Future Sarah Klauer Millennials
- 9. Consumer of the Future Sarah Klauer November IX Meeting
- 10. Generation Z Consumer of the Future Sarah Klauer
- 11. Consumer of the Future Sarah Klauer
- 12. Consumer of the Future Sarah Klauer
- 13. TRENDS
- 14. Consumer of the Future Sarah Klauer Customization
- 15. Consumer of the Future Sarah Klauer Self-Service
- 16. Consumer of the Future Sarah Klauer Self-Production
- 17. Consumer of the Future Sarah Klauer Collaborative Consumption
- 18. Consumer of the Future Sarah Klauer Automation
- 19. Consumer of the Future Sarah Klauer Internet of Things
- 20. Consumer of the Future Sarah Klauer Digital
- 21. Consumer of the Future Sarah Klauer Aging Population
- 22. Consumer of the Future Sarah Klauer City Living
- 23. Consumer of the Future Sarah Klauer Education
- 24. Consumer of the Future Sarah Klauer Tools to Learn More
- 25. THE PLAYERS
- 26. Consumer of the Future Sarah Klauer Utilities/Old
- 27. Consumer of the Future Sarah Klauer Utilities/New
- 28. Consumer of the Future Sarah Klauer Service Start-Ups
- 29. Consumer of the Future Sarah Klauer Product Start-Ups
- 30. Consumer of the Future Sarah Klauer The Government
- 31. Consumer of the Future Sarah Klauer Energy Consultancies
- 32. Consumer of the Future Sarah Klauer Integration
- 33. Consumer of the Future Sarah Klauer Power Flexibility Utilities/Old Energy Consultancies The Government Service Start-ups Product Start-ups Google Utilities/New
- 34. Consumer of the Future Sarah Klauer Power Experience Utilities/OldEnergy Consultancies The Government Service Start-ups Product Start-ups Google Utilities/New
- 36. Consumer of the Future Sarah Klauer Prior to Contract / Purchase
- 37. Consumer of the Future Sarah Klauer Point of Purchase
- 38. Consumer of the Future Sarah Klauer Point of Use
- 39. Consumer of the Future Sarah Klauer Tracking/Passive Points
- 40. THANK YOU!
Editor's Notes
- Although utilities provide power that is used daily for many mundane and critical tasks, “utility” and “energy” aren’t synonymous. Although climate change is becoming more broadly accepted and environmental concern is on the rise, consumers only think about their utilities for an average of five minutes each year. In fact, consumer obliviousness was a strategic objective when homes first became energized-- consumers were scared of electricity! There are several key trends in the consumer-facing energy sector, responding to shifts in consumer demand. Start-ups, data and consumer goods companies, and utilities are vying for attention as technologies evolve. Start-ups bring an advantage in agility to leverage emerging technologies, fresh branding and PR, and lean and aligned teams. As the energy industry evolves to adapt to innovative technologies, the rise of renewable power production, and the realities of climate change, it is essential to understand the energy consumer. American homes consume almost 25% of the energy generated in the United States, and are key utility customers. Leveraging current consumer trends to impact consumer behavior in the energy sector is a huge opportunity that could lead to energy use reduction, improved program adoption, heightened consumer approval and interaction, and increased utility longevity. Consumers are confronted by more information and demands on their time than ever before, and it is difficult to cut through the noise with energy efficiency program messaging. Emphasis on cost savings and environmental benefits is not compelling enough to draw in a majority of homeowners. Recent surveys have shown that, on average, consumers feel they can tolerate a 125% increase in their energy bill before needing to significantly adjust spending in other areas. PG&E was founded in 1905
- The entire traditional electricity value chain takes place behind the meter. Consumers largely interact with their utility when they turn their lights on and when they open their utility bill. Consumers typically have little-to-no awareness of how they get their energy. For many years, the prevailing line of thought was that the less the customer thinks about the utility, the better.
- Generally classified as those born from 1980-1995, they’re currently aged 20-35. In 15 years, the youngest of them will be around the average age of a first homebuyer. Big cultural events: 9/11, 2007 recession, legalization of gay marriage, social media, video games, more women in leadership, columbine,
- So, lots of people like to write about millennials. They have a fair bit of buying power and are on the cusp of having more. They’re starting to be the new parents– huge opportunities for businesses there. Their voice is getting stronger in the market, starting to overtake older generations. The millennial land of opportunity. Right now, they’re where Generation Z will be in 15 years. Characterized as “digital natives,” less affiliated with political parties and religions, more racially diverse (41% non-white), more gender equal (women earn 93 cents to the dollar as compared to the standard 77), and less trusting. A couple of things: 19% say people can be trusted (less than older generations), but 49% of millennials believe that the country’s best years are ahead of it. Even compared to prior generations when they were the age of millennials, millennials are more optimistic. Most highly educated– a third of older millennials have a 4 year degree or more. Their concerns: high student loan debt, lower income than other generations at their age, recession of 2007-2009. When the oldest millennials turned 25, the Academy award for best picture was An Inconvenient Truth (also The Departed) Visible living, entrepreneurial http://www.hansondodge.com/blog/2013/june/millennials--80-million-strong--ready-to-spend http://www.npr.org/2011/11/02/141930849/whats-the-defining-moment-of-your-generation https://futurevision.rga.com/news/defining-the-millennial-generation/trend-brief-millennials-and-a-culture-of-experience/ http://www.pewsocialtrends.org/2014/03/07/millennials-in-adulthood/
- Generation Z: Born 1996-2010. They have never know a time before social media, smart phones, when america was not at war, and Obama was elected in 2009, just before the last of them were born.
- Generation Z They have a sense of social justice, philanthropy and maturity that comes with growing up during one of the most severe economic recessions in history. Having been born post-911, they have never known a time that the United States has not been at war somewhere in the world. They came of age during the Great Recession and unlike Millennials, have no memory of the free-spending boom times that came before. Expectation that they can be anything they want to be. http://www.nytimes.com/2015/09/20/fashion/move-over-millennials-here-comes-generation-z.html http://www.fastcoexist.com/3045317/what-is-generation-z-and-what-does-it-want http://www.forbes.com/sites/lauraheller/2015/08/14/move-over-millennials-generation-z-is-in-charge/ http://people.howstuffworks.com/culture-traditions/generation-gaps/generation-z.htm
- Grabbed from the NYT In 30 years, the last of Gen Z will be reaching average first homebuyer age.
- Collaborative consumption (The pro-sumer who buys and sells energy) Seems obvious: I should be able to buy and sell from peers Crowd-sourcing energy may rise in popularity (Case Study: Vandebron (http://www.urbangateway.org/news/power-peer-peer-energy-sharing)) Crowdfunding, transparency, unused value is wasted value, waste as food, https://en.wikipedia.org/wiki/Sharing_economy By sharing transportation and assets the benefits of a sharing economy are said to include the following: Reducing negative environmental impact (such as reducing the carbon footprint and consumption of resources)[35][36][37] Stronger communities[36] Saving costs by borrowing and recycling items[36] Providing people with access to goods who can't afford buying them[38] or have no interest in long-term usage Increased independence, flexibility and self-reliance by decentralization, the abolition of certain entry-barriers and self-organization[39] Increased participatory democracy[37] Accelerating sustainable consumption and production patterns in cities around the globe [40]
- Internet of Things Smart devices, including Nest, and smart chargers. Consumer-facing electricity generation (mini PVs, wind.) Difficult to incorporate into pre-existing products and systems
- US consumers spend an average of 30 hours a month using apps.
- Growing retiree consumer base Fixed income, more time
- More Americans are moving to cities in the wake of the slight uptick in the economy in recent years, reversing the decades-long trend of settling in the suburbs. New Census Bureau data shows that the American city is experiencing something of a renaissance, driven primarily by migration into the center of the nation’s metropolitan areas. http://www.thewire.com/national/2014/03/more-americans-moving-to-cities-reversing-the-suburban-exodus/359714/
- Millennials are most highly educated generation– a third of older millennials have a 4 year degree or more. Gen Z is slated to be even more educated and intellectually capable.
- Read the newspaper. Watch kickstarter.
- Regulated, rich, big infrastructure. Natural monopoly. Current programming: low-interest consumer and business loans, home visits, lighting improvements, smart meters, whole-building solutions for gas and electric Phone apps to engage consumers Unclear if more apps makes life easier for consumers Most consumers spend 84% of their time using just 5 apps Forrester advises businesses to design their apps only for their best and most loyal or frequent customers – because those are the only one who will bother to download, configure and use the application regularly. For instance, most retailers say their mobile web sales outweigh their app sales, the report says.
- Powershop in New Zealand/Australia In our fifth year of operation, we supply power for more than 50,000 customers in New Zealand and we have recently expanded into the Australian market, initially offering power to customers in Victoria. (A little over 1% of New Zealand’s power supply) Powershop is wholly owned by the multi-billion dollar Meridian Energy Group – one of the world’s largest 100% renewable electricity generators. Generates 33% of NZ’s power. Powershop gives you transparent pricing that adjusts seasonally reflecting the wholesale rates that we pay to the electricity generators. We do not show daily fixed charges separately on bills or within our customer application, that's because we've included everything (including fixed charges) in our unit charge (c/kWh). Your electricity price per unit may look higher than your current bill but don't be fooled - remember that your per unit price includes daily charges, and even GST. What you see is what you pay. We let you buy power online before you use it so that you can budget ahead, or after you use it like you do now. You can treat Powershop exactly like every other power supplier you’ve ever had and do nothing differently - we will buy power on your behalf and read your meter too. You do need to set up a direct debit or credit card payment default, and select a day in the month for payment to be made that suits your commitments. But there is another way and we reckon you’re better off if you login to our online shop and pick up some of the deals and discounts on power that are only available in the shop. Here you can buy as little or as much power as you want, as often as you want. Our Powerpacks come in sizes and prices to suit every budget. It’s failsafe, it doesn’t matter if you use more than you’ve bought up front. When that happens we’ll buy a Top-up Pack on your behalf and there are no penalties for paying later. And, just by finding and clicking our Online Saver special in your monthly reminder email, online shop or mobile app you’ll receive an even bigger discount. So Powershop lets you: Do absolutely nothing differently – just make sure you have the funds available to cover your monthly statement. Or enter your own meter reading online whenever you like so your account will always be accurate and up to date. Buy Powerpacks that allow you to budget and plan ahead. Take advantage of simple online tools to help you understand and track your power consumption, helping you save power and money. Choose how and when you pay for your power, either before or after you use it. Your choice.
- Crowd-sourcing energy may rise in popularity (Case Study: Vandebron (http://www.urbangateway.org/news/power-peer-peer-energy-sharing))
- Nest, kickstarter, etc.
- Policy and law makers. They run behind popular opinion. Indebted to campaign funders. Obama keystone decision Utility regulators– DSM/Renewable mandates They have money to throw around Some of the smartest thinkers
- Influence and educate. Little power, big ideas.
- Google Google has invested over $1 billion in renewable power plants over years and appears poised to be a major player in the energy sector for years to come. Nest Acquisition When asked who NRG Energy’s competitors will be in the future, CEO David Crane put it rather subtly: "If you ask me who I worry about beating us, I give very little thought to the traditional power companies, the utilities." "One of the changes we’re talking about when you’re talking about balancing everyone’s power systems in their house is that it basically becomes an information technology-based industry," Crane explained to The Atlantic. "Of the big four companies that will inherit the Earth—Facebook, Google, Apple, and Amazon—the one that has shown the most interest in this space is Google.“ http://www.utilitydive.com/news/is-google-becoming-an-energy-company/216848/