Energy companies must engage with customers or risk becoming “obsolete” and “irrelevant”, a partner at EY has warned.
Speaking to Utility Week, Yunus Ozler, a partner in power and utilities at the international consultancy, said the sector needs to recognise how customers “can power themselves if they choose to”.
“If power companies are not aware of that they will become obsolete or irrelevant in the near future,” said Ozler.
“They will lose customer relationships in their entirety to someone else, or even to the customers themselves.”
Ozler is one of the authors of a new report by EY on how empowered customers will change the energy market and how suppliers should respond to this new force.
The report warns “now is not the time to be losing customers” and energy companies must work hard to retain customers and deliver real value.
According to the report, cheaper coal and gas will not stop the decarbonisation process and new technologies like artificial intelligence, drones and blockchain will enable “much wider disruption than previously believed possible”.
Ozler said the growth of more empowered and independent customers can already be seen in the commercial sector, with companies like Apple generating renewable energy themselves.
“Effectively Apple, which used to be customer, has now become the power company itself,” he adds. ”They do not need an energy company and that’s the trend.”
The partner said other international firms, Mercedes Benz and BMW have already set up energy companies in the US and Germany, and companies in the UK will soon start following suit.
“I would like to energy suppliers see this new world as an opportunity, but if they don’t it will very quickly become a threat,” he added.
In terms of opportunities, Ozler said there is still evidence to suggest domestic customers trust energy companies when it comes to buying smart technology and new equipment.
“The customers are more and more informed,” he explained. “They want the energy company to do it for them and take the lead. But the energy companies are going back into the world of tariffs and prices. We need to more the dialogue away from prices and tariffs, to technology-empowered customers who can innovate.”