Market view: 2016 - a year of positive change

From an increase in renewables to the growth in the popularity of plug-and-play products, 2016 has been a year of positive change for the sector. These are three key developments that looked to disrupt ‘classical utilities mindset’.

Energy generation

Final approval of Hinkley Point C in September, which will look to provide 7 per cent of the UK’s energy needs once it comes online, was a major moment for the UK energy sector. Nuclear power is now set to become a key contributor to the UK’s energy mix going forward.

In what was a big year for the growth of renewable generation, green energy now accounts for 20 per cent of the UK’s daily energy capacity. Renewable energies and energy efficiency programmes have also resulted in the considerable reduction of carbon dioxide emissions.

Energy supplier market

Competition among energy suppliers rocketed this year. With a total of 44 energy retailers now operating in the market, including 15 new entrants. This means that the UK is now one of the most competitive energy markets in the world.

Advances on a consumer level

Customers switched on to the idea of the connected home this year, with connected home devices soaring in popularity as products matured and further gained the backing of big brands. These technologies entered the mainstream with consumers beginning to realise the benefits of the digitised technologies offered by utilities providers.

The launch of the Data Communication Company in November 2016 was a huge turning point for the smart meter rollout in the UK too. In theory all 53,000,000 smart meters across the country are now set up to efficiently communicate with suppliers, consumers and the utilities sector at large once installed. The next step will be to see whether the infrastructure has the capacity to run the data provided by the large volume of smart meters.

Fierce competition by energy suppliers also led to new tariffs being introduced on the market, including the implementation of time of use tariffs. This shows a turning point with regards to how energy suppliers engage with customers going forward, because now it will be commonplace to use tariffs as a way to boost customer retention and satisfaction. With more and more tariffs entering the market, it is likely that making the process more complicated could lead to customer dissatisfaction. However, only time will tell.

 

Author: James Forrest, head of energy & utilities, Capgemini UK and Alain Bollack, vice president, smart energy, utilities, Capgemini,
Channel: Customers , Policy & Regulation
Tags: UK , Nuclear , Metering , Smart Metering , Energy Efficiency , Customer Management

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