Data will fuel a new electricity revolution - Drax
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Data will fuel a new electricity revolution

The next revolution in the electricity industry will be driven by consumers, but producers must enable it, writes Drax Retail CEO Jonathan Kini.

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Society today is more environmentally-minded than ever. Just look at how quickly plastic straws and bottles have gone from something millions of people used every day without a second thought to a global symbol for excessive plastic waste. This new generation of conscientious consumers even has the power to force some of the world’s largest companies to change.

People are clearly keen to play their role in a greener future. But how can they participate in something as far removed from daily life and intricate as the electricity system? The answer, I believe, lies in data.

Data is revolutionising almost every industry today – from architecture to transport to music. Electricity is no exception. The government’s plans to install smart meters in every home and business, each producing 48 readings a day, will offer us a wealth of data into how electricity is consumed.

But beyond just allowing more accurate billing, this influx of information can enable electricity companies to educate and, ultimately, empower consumers to take greater control of their electricity consumption.

This is part of a profound ongoing change in the electricity industry that will see a fundamental shift in the relationship between consumer and providers, and open new opportunities for those that are prepared for it.

A consumer-led green revolution

What will make data empowering for consumers (both domestic and business) is not just how it can show them how much electricity they use, but how it allows them to understand their electricity consumption.

It will be the role of electricity suppliers to guide consumers and advise how they can save money and reduce their carbon footprint by being more energy efficient. But this will require a shift in the relationship between electricity providers and the consumer.

Recent surveys found that small- to medium-sized enterprises (SMEs) spend less than six minutes a year thinking about their energy bill. If greater grid-wide efficiency and carbon reduction is to be user-driven, then providers must adopt an advisory role which consumers can easily interact with. This will require a level of customer service not widely seen in the power industry today.

Data will allow providers to show consumers the direct impact of their sustainability actions and allow them to monitor their electricity consumption on a more regular basis. For this to successfully become a part of consumers’ lives, however, it must be as seamless and accessible as possible.

Consumers shouldn’t have to keep updating a spreadsheet of their own electricity usage. Rather, their consumption, costs and carbon savings should be easy to review and keep track of – much like how mobile banking has changed the way we access our money.

The role of the provider in the future system

Adoption of electric vehicles increased by 280% in the UK over the past four years. This will only grow as the government’s 2040 end date for new diesel and petrol-powered cars approaches, so what does this mean for the grid of the future?

Charging the oncoming wave of electric vehicles will increase demand on the grid while, by contrast, growing levels of decentralised generation – like rooftop solar panels – will have the reverse effect, with consumers able to generate their own electricity and sell any excess back to the grid.

These two trends are central to what some in the energy sector are calling its ‘tipping points’ – moments marking fundamental shifts in how it operates. In a report authored by EY and a leading global analyst house, three tipping points have been identified: the moment at which off-grid energy becomes as affordable as grid-delivered energy; when EVs gain price and performance parity with combustion engines; and when the cost of transporting electricity becomes greater than that of generating and storing it locally. All three are not only highly likely, they’re on track to be achieved in the next 20 years.

These shifts in how, when and where generation happens in the future will be led by consumers, but generators and suppliers need to prepare for it today. On one hand, it is going to introduce greater complexity to the grid. Multiple distributed generation sources must be integrated, while equilibrium must be maintained whatever the EV charging patterns. On the other, the development of technology and connectivity this shift will bring, will mean more information and data than ever.

Making sense of this complexity and data will be essential for domestic and business consumers to know when it is most cost effective to charge their electric vehicles or sell their excess self-generated electricity back to the grid.

And for providers, it will be a fuel for innovative services and packages that work around the future needs and capabilities of consumers and the wider electricity system.

The electricity consumer is ready to adopt sustainable sources and money-saving efficiency practices. Data will allow the provider to make this a reality.