Smart energy must crack scaling issues to ensure renewables reach their full potential

DevicePilot CEO, Pilgrim Beart – founder of the platform which eventually became British Gas’ Hive – outlines how he believes the UK smart energy sector can best weather a ‘perfect’ storm in H2 2022.

The next six months feel momentous for the future of UK’s smart energy sector and the country’s net zero efforts. There is a perfect storm forming for UK consumers concerned about their energy bills.

The dark clouds have started to roll in and the unfavourable elements include April and October’s energy price hikes, the current cost-of-living crisis, and a government that appears reluctant or unable to intervene.

Unfortunately, things may get a lot worse before they get any better. However, I have full faith in the UK smart energy market’s ability to respond.

There are many remarkable smart energy vendors based in the UK who recognise the urgent need to help consumers navigate these tricky waters. If they can reach their potential over the next six months, 2022 represents the best chance the UK has ever had to switch away from fossil fuels, forever. It won’t be easy, there will be many challenges ahead for smart energy vendors, but it is possible.

Today’s market

The impact and scale of the cost-of-living crisis and soaring energy bills is well documented. The short-term situation for most households is brutal.

However, it is the energy sector’s responsibility to consider the much more positive long term outcomes that are possible and how we can achieve them.

Today’s perilous energy market presents a once in a generation opportunity for the sector to implement lasting change. It is a small window for smart energy vendors to seize their fair share of the market, for the benefit of consumers and the environment alike.

As financial pressures grow bigger for more people, the goods and services that can help lower energy costs and slash household bills will become even more attractive. Smart energy vendors who can cut energy use and costs over time now have a business case that is twice as good as before.

Soaring household energy bills should be the catalyst for more people to invest in smart energy products like heat pumps and electric vehicles. This will lessen the UK’s dependence on fossil fuels, its use of imported oil and gas, and will act as the foundation of the UK’s entire net zero efforts.

The UK smart energy sector must be relishing and dreading this challenge in equal measure. Organisations in the space must react urgently, or they will quickly find that their competitors are steering the ship instead of them.

The challenges ahead

The biggest fear for smart energy vendors is that they won’t have the ability to scale at the speed, or to the size needed in the months ahead.

These tech companies specialising in areas like electric vehicles, smart meters or other smart energy products like heat pumps will inevitably discover that scaling is extremely hard. It’s a very different proposition to service a few thousand households of early adopters, versus reaching hundreds of thousands or even millions of people. Maintenance and support costs can skyrocket as smart vendors expand, and consumer expectations are growing rapidly too.

In many ways, energy is the ultimate commodity product – electrons are electrons after all. So smart energy vendors have an opportunity to provide utilities with unique features and differentiation, and to differentiate through service quality and reliability too – which is difficult at scale.

As smart vendors expand, they will need to get over the hump sooner rather than later. They will need to automate as much of their new operational workloads as possible, including device updates, as well as software and hardware fixes. These products must be treated as a service rather than a traditional consumer product like a dumb thermostat.

For electronic vehicle providers, there is the added wrinkle of incoming reliability laws. Soon, EV providers will need to guarantee 99% reliability for their chargepoints. Considering that these devices are new and being rolled out to the entire country, this is a big challenge. They are in constant use by the general public, and therefore prone to error and misuse. They can even be hit by drivers, which is a technical issue that most consumer electronic devices don’t need to worry about.

The future   

As a nation, we are not overly blessed with sun for solar power, but photovoltaic electricity technology in 2022 is remarkable and already making a meaningful contribution to our grid.

Likewise, offshore wind is increasingly a cheap and reliable source of energy in the UK. Meanwhile, as a small densely populated country, the UK doesn’t have the connectivity and EV infrastructure challenges of larger nations. The UK should aspire to being a world-leader in the EV sector, an ambition well within its reach.

There are many ways that the UK smart energy sector can help the nation navigate this perfect storm and emerge stronger for doing so. Yet, only once the smart energy sector cracks its scaling issue will the renewables sector reach its full potential. When it does, it will be a blessing for consumers, and help the UK chart its journey towards net zero. By the end of 2022, I hope UK smart energy vendors don’t look back at the previous months as an opportunity missed.