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18 | 10TH - 16TH JULY 2015 | UTILITY WEEK Operations & Assets Analysis B y 2017 retail energy competition will look very different. By then, some European utilities will have 50 per cent of their customers on smart energy insight and heat controls. Even in the shadow of the UK's imminent national smart meter rollout, energy sup- pliers must keep in mind that smart meters are not the only form of smart data-driven customer engagement device for energy and heat that can exist at scale. In fact, connected home devices can be even more effective. While British Gas leads Europe on abso- lute volumes of connected home technology deployment, Dutch energy supplier Eneco is leading Europe on penetration of its cus- tomer base and is set to have half its energy customers using a connected home platform by 2017 for heat and energy insight. The evidence so far is that its technology and engagement platform builds a customer relationship, cuts churn and drives net pro- moter score. I believe this will give Eneco a major com- petitive advantage in its core energy retail business. Other utilities are failing to seize this opportunity in the same way because oen their boards fail to provide leader- ship and vision. The business case for scale deployment of connected home devices is not obvious (though it is possible, as I will show), and there is no plan for the culture and brand change that is required to support connected home customers. Most UK utilities have some type of data- driven customer engagement around energy cost, comfort and control. For example, Eon has partnered with engagement platform provider Opower and British Gas has built its own energy report. The benefits of these services increases with the frequency of the data obtained, with the lowest benefits seen in association with estimated reads and maximum benefits in association with smart meter data where the customer can opt-in for half-hourly reads. Opower and its competitors have shown they can improve customer service cost, net promoter score, churn, cross sell, bad debt and much more through insight, behav- ioural science and segmentation. But with other burning platforms, utilities sometimes downgrade such engagement projects from urgent to important, particularly as the national smart meter programme – needed to deliver the frequent data that drives the deepest relationship – hits more delays. The mass market smart meter rollout is now due to start in 2016, four years later than originally planned. This is due to many things, not all complementary, but it is in part a function of the sophistication and ambition of the programme and the collabo- rative approach taken by the Department of Energy and Climate Change. What if there were a way to engage a high proportion of the customer base on their energy today, without the need to wait for the successful realisation of the national smart meter rollout. and to do so daily? There is, and it demands a priority reas- sessment in the boardroom. Eneco has done just this by rolling out more than 100,000 smart thermostats. The number in itself is not earth shattering. What is attention grabbing is that Eneco has pub- licly announced a three-year ambition to have one million installs with its platform partner Quby. This means that by 2017, 50 per cent of its retail energy customer base will have a smart thermostat. Uniquely, the proposition isn't just a smart thermostat. As Eneco found the incre- mental cost to be negligible of adding sen- sors to the thermostat to also electronically read the dumb gas and electricity meters, it chose to create a combined bundle of smart thermostat and pseudo smart meters. I use the term "pseudo" smart meters because the dumb meter sensors provide energy usage but lack support for some key attributes of full smart metering. For example, they don't support time-of- The smart move is to act now In the first of a new series exploring the connected home and consumer engagement, Susan Furnell discusses the business case for suppliers jumping ahead of the smart meter rollout. Smart thermostats Smart multi-zonal systems Other Installed base in Europe PROJECTED MARKET FOR SMART ENERGY DEVICES IN EUROPE 700,000 connected home 'energy' products Annual sales by 2017 Tariff optimisation Microgen optimisation Smart thermostats Source: Delta-ee Smart multi- zonal systems Remote diagnostic >2.2m connect home 'energy' products a year