Enervee’s presentations and keynotes at the Delta EE Digital Utilities European Summit, and with the OECD, reveal the pace of change in the energy sector.
In late April this year, Enervee presented its work and insights around energy-smart behaviors at two distinct events. First, there was Delta EE’s Digital Utilities European Summit (Edinburgh). For this Enervee, ran a series of sessions on the potential of applied behavioral science and how the energy sector specifically could potentially better deliver on a range of objectives if these principles were woven into program design. And second — a few days later — there was the OECD’s ‘New Normal expert dialogue’, where we held keynote and discussant roles as a diverse group of individuals looked at how behavioral science could help governments meet objectives in the name of the Sustainable Development Goals.
Rather than share our presentations and inputs, we’ve instead pulled together our top 5 take-outs from these two events.
Disaggregation services appear to be looking to change direction yet again. At last year’s European Utility Week, we noted how one leading disaggregation service provider shared their best-case scenario of accurately identifying an appliance and its energy usage at marginally less than 50%. At the time we felt any proposition for consumers that has a 50% success rate is really not a great proposition at all.
However, at the time, it was argued that, even at 50%, the possibility of knowing how much energy your fridge is using is a break-out opportunity to drive customer engagement for the utilities. Fast-forward eight months, and the speech has now morphed into one of how voice can be seamlessly integrated into the disaggregation proposition for consumers. Possibly hearing how much your fridge uses in kWh rather than seeing does make a difference (although I don’t believe in the direction they’d like). But this focus on what is — essentially — a different medium or channel through which to engage, still doesn’t solve the ‘around 50%’ accuracy issue. As one vendor explained to me, consumers care the most about where they’re wasting the most energy, and it’s these heavy appliances that are the hardest to spot, based on their energy signatures. This vendor also pointed out that their company is using dedicated hardware in the home to measure energy loads every 1/400th of a second, and even at this frequency it’s proving difficult to tease out with confidence which appliance is using what. Compare this to current European smart data measuring intervals, and there seems to be a long way to go.
EVs and their adoption was a popular topic, as it is at every energy conference these days. Yet more and more it’s becoming clear that utilities are less worried about how many people are going to switch from conventional vehicles, and instead what charging is going to look like. In other words, from buying behavior to charging behavior.
On the one hand, there’s the argument that conventional service stations will be replaced by charging stations. Should this gain traction, then EV drivers will be charging their cars in a way they’re familiar with. This would be a win for the status quo — why change it if it’s not broken? But there’s also the opportunity to charge overnight at home, taking advantage of EV dedicated tariffs and avoiding the inconvenience of kicking your heels for however long it takes to top-up (even 5' feels like a long time on a forecourt). For energy companies, these two options are important on several levels. Not only will the new dominant charging behavior determine success for in-home charging points and other domestic charging solutions being proposed, but it’ll also determine which energy companies are best-placed to power this new behavior; gradual, decentralised and near-constant charging at home clearly favours those energy companies that lead in nuclear generation.
Amongst all the talk on behavior change, it’s interesting — and disconcerting — to hear how attitudes are still positioned as the guardians of behavior change. In other words, change attitudes (or create attitudes) and then the corresponding behavior will follow. This view is particularly strong when it comes to ‘responsible’ or ‘sustainable’ behaviors; that somehow establishing the behaviors via other means is somehow wrong or cheating. We know this is not the case; that attitudes can be altered in order to be consistent with new behaviors. So if we can elicit a behavior, we can then think about the attitude afterwards. The objection to such techniques when it comes to more responsible behaviors (think energy, food, drink, exercise), because it’s perceived as being manipulative, is odd considering most people express a desire to do these things better in the first place. We argue the Enervee Score works effectively because it focuses on the behavior and not the attitude, and the OECD’s report on behavioral insight-led policy design is a shining example of how we can see results here. But it really is time to stop obsessing about securing the right attitudes first.
Products becoming services (‘servitization’, in business schools lingo) — there are plenty of examples. Rolls Royce is a favourite, as it’s the most elegant and profound use of the concept; rather than thinking it supplied engines to airlines (blades, fans, fuel lines etc), the company now recognises it supplies thrust. Thrust is what airlines buy from Rolls Royce and what’s more, they expect it to be delivered at the very split-second it’s requested. We also see this servitization cropping up in residential energy-use situations: washing services (rather than washing machines) and even heating and cooling services (as opposed to water-heaters and air-conditioning units).
But it looks like this transition from product to service is only one part of the change; that actually, great service is increasingly a combination of the right products and services, all delivered at the right time. Products will not be superseded by services, but will be improved by services, and these combine to represent ‘the service’ for consumers. As Rolls Royce has demonstrated, this is far from semantics, and an opportunity for dramatic revisions to business models. And as is often the case, the consumer is in the lead. Marketing scholars argue that consumers buy experiences (not products or services) and the experience is the service. It’s a total experience economy, and energy companies are part of this economy.
Across both events, it was clear that behavioral science has a critical role to play going forward. Whether it’s marketing functions within energy providers, or policymakers around the world — behavioural science can dramatically improve the effectiveness of any intervention (be that a campaign or a policy). Vivid examples were given, such as 2-minute edits of hit tracks by South African music artists to change showering behavior (driving more people to only shower for 2 minutes). And of course, we presented Enervee’s results in terms of using a tool that activates a heuristic for decision-making when it comes to efficient appliance purchasing (the Enervee Score).
The opportunities are near-endless. But these opportunities rely on two things happening. First, we have to let go of the misplaced belief that without attitude change, behavior change is either impossible, or ‘fake’ (see 3.). And two, despite the seemingly vivid effectiveness of behavioral science interventions, nothing can compensate for stringent design and testing. Sloppy design involving basic cutting and pasting from other contexts runs the risk of making the application of behavioral science erratic at best, and deceitful at worst. But done well, behavioral science interventions are exactly what we need more of.
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