August 21, 2017 Read More →

Dutch Utility Changes the Game by Showing Customers How to Buy Less Power

New York Times:

When Eneco, a major Dutch utility, tested a promising energy monitor in several dozen homes, things could not have gone much worse. The company making the devices failed to deliver enough of them, and some of those provided did not work.

But when Eneco sent workers to recover the monitors, something strange happened — a tenth of customers refused to open their doors. “They wanted to keep it,” said Tako in ’t Veld, a former Eneco executive who now leads the “smart energy” unit at Quby, the company that makes the energy meter. “They were so happy with the energy insight.”

The test in 2010 was part of Eneco’s efforts to adapt to upheaval in the energy market. In recent years, large volumes of wind and solar-generated electricity have undermined the economics of traditional power plants and provided the outlines of a future in which conventional power plants no longer supply the bulk of a home’s electricity.

Through acquisitions (including of Quby), by nurturing a cluster of start-ups and with other initiatives, Eneco has sought to provide new services to customers — and, in doing so, to enter new sectors, like the charging of electric vehicles and the repair of solar panels.

“We said ‘we have to create an increasing customer loyalty by doing something different,’” said Hans Valk, chief executive of Quby and formerly the leader of Eneco’s consumer business. “What we are trying to do is switch from selling a pure commodity to selling energy as a service.”

For instance, Eneco owns Jedlix, an electric vehicle charging unit, which has partnerships with Tesla and BMW and allows car owners to recharge their vehicles inexpensively when there are large supplies of renewable energy on the grid. Jedlix sometimes even pays them to do so.

Eneco is also starting a business called CrowdNett which, unusually, pays customers for some of their power. Eneco looks for people who already have solar panels at home and tries to sell them a large home battery, like a Tesla Powerwall. Surplus power generated by the solar panels is stored in the battery and Eneco taps into a portion of that storage to help balance the electricity grid. Customers will receive 450 euros, or $530, a year for allowing use of their batteries.

Eneco’s leaders concede that they are proceeding more by trial and error than following a grand plan. Still, these efforts may, over time, aid the company’s survival and contribute to creating ways to help consumers shift to cleaner energy.

“They are very forward-looking in terms of strategy and mind-set,” said Roberta Bigliani, a vice president at IDC, a market research firm. If Eneco’s experiments flop, though, “they definitely will not be in operation in the future,” she said.

So far, the experiment with its wall-mounted energy monitor, known as Toon, has been among its more successful.

When Eneco first considered the test, the utility was locked in a profit-zapping battle with competitors, cutting prices for electric power and natural gas while giving customers gifts for signing up. Seeing the danger signs, Eneco’s management decided that a radical change was necessary.

The Toon offered Eneco an opportunity to shift course and, despite early teething problems, Eneco expanded the rollout. The meters allow customers to control their domestic heating settings through a smartphone app, and they have displays that show electricity and natural gas consumption in detail, along with other information like weather forecasts.

Full Story:  Dutch Utility Bets Its Future on an Unusual Strategy: Selling Less Power

 

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