How can you meet customer needs if you do not know what they want and does a single tariff model fit all customers? Energy Service Companies operating heat networks should challenge their existing business models and focus their efforts on improving the relationship with their customers. Those are the essential conclusions from a Heat Networks workshop in London in October with UK Local Authorities and Swedish Energy Service Companies.
The heating of homes and businesses stands for almost a third of the United Kingdom’s emissions, and introducing heat networks has been identified as one of the most effective solutions to reduce emissions. With the recently released Clean Growth Strategy, the British Department for Business, Energy & Industrial Strategy (BEIS), confirms that heat networks will come to play an important role in the future of the UK energy market.
As the population of the United Kingdom is becoming more conscious about its environmental impact, customers are increasingly curious about understanding their individual carbon footprint. The roll-out of smart meters in the UK is one step in the right direction, increasing market transparency about energy consumption and costs. It also enables customers to make more informed decisions about their energy consumption, costs and carbon footprint. Smart meters may also act as a gateway to a more connected home, a growing market partly driven by large tech giants such as Amazon and Google. However, it is not only the customers but also Energy Service Companies (ESCOs) who are affected by the technological developments. ESCOs will have to incorporate the new technologies to increase generation and network efficiency, and to reassess their business models to stay relevant. To be able to capitalise on the transforming market, ESCOs will have to become more customer-oriented, better understanding of their customers’ needs and move away from being a bulk supplier and become a service provider.
When developing heat networks, it is important to think long-term and plan for future system-wide integrations. In the recent workshop, one of the key points made was that in order to plan long-term developments the ESCOs need to build customer trust and properly understand the market. In some developments, a “one-fits-all” tariff model may work well, in particular, if customers’ demand is similar. However, in the case of a widespread demand among customers, the tariff models need to be flexible in order to deliver a competitive price. One way of establishing trust and understanding the customers’ needs is co-creating schemes with the potential customers.
In summary, the main take-away from the full day’s discussions between the Swedish companies and British local authorities is that the developers and operators of heat networks should understand, establish trust and collaborate more with their customers in order to create and maintain efficient heat network schemes.
Please contact the Heat Networks team if you wish to learn more about this specific workshop and topic. Participants of the recent workshop included London Borough of Brent, London Borough of Ealing, London Borough of Greenwich, London Borough of Merton, Stoke-on-Trent City Council, Birmingham City Council, Glasgow City Council, Exeter City Council and the Greater London Authority. Swedish ESCOs and suppliers participating included Göteborgs Energi, Borlänge Energi, Öresundskraft, Sweco, FVB, SWEP, Wideco and Alfa Laval to mention a few.
Sweden is at the forefront of decentralised heat networks technology. Our aim for “Heat Networks – Sustainability by Sweden” is to facilitate knowledge sharing between British and Swedish stakeholders and develop and encourage environmental and economic best practice.
To find out how we can help you and your organisation, please contact our London-based “Heat Networks” team. We can introduce you to leading consultants, suppliers of technology and services who will be pleased to share know-how of the development of heat network solutions.