[Speaker Interview] With Andy Sage, Head of Partnership Propositions at E.ON Next

Why is E.ON Next bringing personalisation into energy?

Our electricity grid is changing to use more renewable electricity, and consumers have a much bigger (personalised) role to play.

Electricity has traditionally come from a small number of large (centralised) fossil-fuelled generators, that distribute ‘outwards’ through an electricity grid (all the substations, pylons and wires).

Generally, it’s been straightforward to predict how much electricity needs to be generated, and where it should be distributed.

At E.ON we talk about ‘New Energy’. This is a grid based on electricity from renewable sources. Technology & software means electricity can be made, used, stored and returned from almost anywhere on the grid.

Every turbine, solar panel, hydroelectric plant, battery, electric car, electric heating system and major appliances, and how much and when they play a part. And, how much and when people use electricity, and adopt technology, plays a part too.

This makes it harder to predict where, when and how much electricity will be available and needed.

To make New Energy work, we’ll need a deeper understanding of people’s electricity use through technology and how their behaviour might change, to personalise products and services to make sure the electricity grid – New Energy - works for everyone.

How does E.ON Next gather and utilise data to understand the unique energy usage patterns of individual households, and what role does this play in personalizing energy solutions?

We will develop a much deeper understanding of energy use. How consumers perceive ‘value for money’ will be influenced by (evolution of) their individual perceptions, behaviours and technology adoption.

Smart-meter data, particularly half-hourly (or even more frequent) readings which show the in-day usage patterns, is an important data source. But, this tells us how much was used and when. But not always exactly why, and how the pattern may change.

For example, two identical homes with below-average energy use (through smart meter readings) could be because one has solar panels, the other has 1 person living there. A year later the first home starts using more electricity to charge a car; the second one because a large family has moved in.

Connectivity now means car-charging data is more accessible. How much electricity is used and when depends on the car battery size and the patterns of mileage. The annual amount may look the same, but it could be 20 miles every day and ‘topping up’ the battery at night, or 100 miles done one day a week and need a longer charging.

Knowing these reasons for how much energy is used and when during the day every day, will mean we can personalise energy solutions, and give prices and times that help different homes balance practicality and cost.

How does personalizing energy tariff cost structures based on individual household data improve both efficiency and cost savings, and what tariff features do customers value most?

Every consumer’s efficiency journey will be different depending on how they use technology, change behaviour, and the energy tariff structures they use, with convenience (balancing cost and practicality) as the most valuable feature.

‘Efficiency’ has generally been about practical ways to use less energy and lower cost.

‘New energy’ efficiency will be about managing how much electricity is used, and when, for living, storage and returning to the grid.

Every house and person (and every business) are likely to be different depending on perceptions, how practical and desired it is to change behaviour, and what type of energy technology and software they (start to) use.

For example, an older house with a young family will have fewer practical options to change when they use energy, such as keeping the house warm and meal-times. And, paying for solar panels or a battery up-front is too much.

But, they could make some small changes, such as using their tumble-dryer in the early evening. And they could afford a monthly payment for solar panels or a battery.

So a personalised solution would be a ‘static’ time of use tariff – a consistent set of times every day that electricity is cheaper to use, so they could plan when they do the family laundry and tumble-dry.

And, a simple journey to add the cost of solar panels to their mortgage, and ‘export’ payments for exporting any spare electricity.

By contrast, a home with an EV & home-charging, doing a small daily mileage, parked mostly at home and topping up the battery each night, could take full cost advantage from “Vehicle to Grid” and “Vehicle to Home” - Taking advantage of the car’s battery to store grid energy when it’s cheap from low demand and high renewables, and return it when the demand is higher (and or renewables generation is lower). The customer only uses a small part of the battery each day, so it’s still practical.

When it comes to what customers ‘value’, I think it’s important to remember that customers don’t buy ‘energy tariffs’. They pay for energy to enable what they want to do and need. The most important feature for most consumers is convenience - the simplest ways to balancing cost and practicality.

What’s also important is we don’t leave anyone behind. For some customers, using ‘new energy’ is extremely impractical or a very long way off. An important feature is how we manage energy costs so that some of the benefits are smoothed out so that everyone can benefit.

Can you explain how personalised energy management helps balance renewable electricity generation, storage, and usage, and what specific personalised features do customers appreciate in this context?

‘New energy’ means everyone, and every piece of technology and software will have a role to play in our energy grid.

Making New Energy work there will mean, in near-real-time and across the grid, processing data about how much electricity is being generated, used (and stored) and returned, and setting incentives (costs) so it all balances out. This includes models and actual data about the weather – which constantly changes how much electricity is available (levels of sun and wind), and use (keeping places warm or cool).

Personalised energy solutions will help E.ON contribute to the balance. We’ll have a clearer picture of how our customers will use, store and return electricity to the grid, by incentivising with different cost and time structures, and also knowing and managing different technology combinations. For example, pausing and restarting charging a car or heating system. It would give the customer simple choices to balance practicality and cost.

The great news is, like most products, personalised energy use will have ‘adoption curve’ - the natural set of stages where a small group will try the latest thing to have prestige from being a ‘pioneer’, and those that wait until the methods are proven to give value.

And, even better, we can create products and services now that work for both groups! Pioneers will try out different software and technology, and make some sacrifices, to eventually get the most out of tariffs that have dynamic costs. And, there are already customer groups using very simple tariffs which have more predictable costs at the same time every day – for example those charging up a car at home overnight.

The common feature customers appreciate across nearly every new innovative product and service is creating a new type of convenience – simplifying the journeys between existing products and services, making it easier to get the same outcome for a lower cost.

What strategies does E.ON Next employ to encourage behaviour change and adoption of automation among consumers, and how do these personalized approaches enhance customer satisfaction and engagement?

Our strategy is to stay focussed on true customer needs and wants, and to keep things simple! It’s on us to make New Energy work.

Our strategy is underpinned by constantly reminding ourselves that consumers don’t by energy tariffs. They pay for energy to enable what they want to do and need.

Energy is something that very few people really want to engage with. For the majority, it’s a bill each month and one of so many other things on their minds – mortgage, car loan, work, kids, dinner, housework, the weather.

So New Energy will be about more than just different times and rates in a tariff. It’s about understanding how people feel about changing the way they use energy, what new technology and software they may start using, and how that might change over time and what influences the change.

Early adopter customers will dive right in – so we’ve designed tariffs and journeys that give opportunities for us and consumers to test and learn very dynamic energy costs.

There are other customers that aren’t yet ready for anything complicated, so we’ve launched simple tariffs designed for electric cars and electric heating systems that have one or 2 (longer) cheaper periods at the same time every day. This makes it easy to schedule car charging or the heating system with an app. And, the difference between the cheaper price and peak times isn’t so large that if something goes wrong, a customer doesn’t get an unexpectedly large bill. This means they don’t get the full benefits of using electricity at cheaper times, but they also aren’t paying the full cost of using electricity at the more expensive times.

As customers realise that changing when they use electricity is relatively practical, and they increasingly trust technology & software, they can start to use tariffs that are more dynamic and reduce their costs even further.

We were also the first to have a mass-market Demand Flexibility Service, which paid customers for voluntarily ‘turning down’ for 30-60 mins in ad hoc events during the winter. And, most of those that participated achieved a target reduction in energy use, so they were able to change their behaviour slightly, and we could see that some had used software to do it.

It’s also important we remember to understand what consumers are using energy for. Our electric car tariff has a cheaper cost that finishes at 7am each day. We could finish it earlier and make the off peak shorter and cheaper; but part of having an electric car is the “preconditioning” – a 7am finish means it’s cheaper to warm up (or when it’s rarely needed!) cool down your electric car in the morning for your commute. Understanding what is important to customers when they use your product is an important part of personalisation.

We’re also starting to think about ‘unhappy paths’. Personalised tariffs will rely heavily on smart meter data, so what happens if a meter stops working and we’re missing data? Customers will expect us to do the right thing, such as early alerts if a customer’s bill goes above an expected level, or a fair cost if a we’re missing a handful of meter reads over a month. There is a fine balance to being helpful, but not invasive; most customers are unlikely to want their energy company constantly alerting them that they think their energy use doesn’t seem right. 

What conversations are you most looking forward to at the Personalisation Summit?

I’m looking forward to understanding product adoption in other industries, and being over-enthusiastic(!) about how technology can make New Energy work for everyone.

I’m looking forward to understanding consumer trends in other industries. All products have the common theme of ‘innovation’ being how/where/when the customer’s true needs were discovered and addressed.

Very few customers buy a ‘product’. They buy an ‘outcome’, and it’s often very personal (and changeable over time). There’s a lot of ‘Maslow’ involved - around it being cost, convenience, prestige, emotion. The secret to success has been understanding the true motivation towards products and brands and the consumer adoption curve.

Energy is now in this space. Customers are starting to think about what outcomes they want to achieve where energy is the enabler. Be it behaviour change, using new technology and software, wanting to ‘belong’ with others or being a pioneer.

I’m also massively (over) enthusiastic to talk about when technology solves a problem without anyone really noticing. Think about how safe cars are now – when you suddenly get into a dangerous situation, do we really think about all the calculations and interventions that happened to keep the car stable – in microseconds the car has (re)applied the brakes, changed the suspension, move power from one wheel to another. We just have a little ‘scare’, and the car has a slight wobble.  

I feel really excited about a world where, through amazing technology, people just forget about energy. It’s there when they need it for a fair value each month. What they didn’t realise is how really complicated it was behind the scenes; with software(s) and technologies everywhere connected so that every turbine, panel, battery, car, heater, appliance, is in harmony. For them it’s a couple of options on their phone. This is ‘New Energy’

It’s on us – on E.ON and everyone – to make this New Energy work – we can change our thinking, see this as a journey of evolution and discovery, and leave no-one behind.

Join Andy and other industry leaders at the Personalisation Summit this November to explore cutting-edge strategies, share insights, and discover how leading brands are leveraging data-driven personalisation to transform customer experiences and drive business growth.

Download the event agenda here. Don’t miss the chance to network with industry experts and gain actionable insights that will help your organisation stay ahead in today’s competitive landscape!

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