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  1. Politics
8 November 2016updated 09 Sep 2021 1:22pm

How startups and innovators will help power the energy revolution

Romilly Dennys is Executive Director for the Coalition for a Digital Economy. 

By Romilly Dennys

In 2015, more than one million UK households left the Big Six energy suppliers, in favour of smaller companies.

It’s no coincidence that this dramatic departure aligned with the digital transformation underway in the energy sector.

A transformation that is long overdue, but now empowers consumers to take control of their energy use and is ripe with startups and challenger entrants disrupting the status quo.

Now the consumers have spoken – partly thanks to campaigns such as The Big Deal – and it’s clear what they want: affordable energy, greater choice and control, and lower carbon use.

It’s also increasingly clear who is paying the closest attention, and that’s the challenger entrants putting both the consumer and environment first, supported by an innovative use of digital intelligence and data analytics that help deliver a better service and lower costs – duly passed on to the customer. 

As we are witnessing in the financial services sector, startups have the digital agility and expertise to instantly react to customer needs and deliver an improved service, before the established players have even organised their next Board meeting.  This is why energy companies are seeking to work with startups to help implement new technologies, rejuvenate corporate culture and innovate their brand. EDF for example has a dedicated team of twenty people sourcing startups to collaborate with, and have created the EDF Pulse Awards to help startups gain greater visibility.

One startup the Big Six could learn from is Bulb Energy: a startup renewable UK gas and electricity supplier that for every unit of electricity produced, places a unit of renewable energy on the grid – from wind, hydro and solar.

The co-founders identified that three quarters of people wanted to switch to renewable energy but only 1% chose to switch, caused by inertia in the market. In part, driven by the exit fees charged by suppliers that created a significant barrier to switching.  So Bulb took it upon themselves to not only waive exit fees but also cover the cost of exit fees for new Bulb members. What’s more, Bulb will soon start rolling out smart meters that themselves will enable 24-hour switching. 

But despite good progress, the problem persists, highlighting the importance of smart meters. Seven in ten customers are on suppliers’ most expensive tariffs – paying as much as £389 a year more than those on the firms’ best deals. Most notably, pre-payment customers. 

Further up the digital ladder we’re witnessing the dominance of multinational tech players, such as Google, leading the way in helping to power the world with clean energy and a commitment to purchase nearly 2.5 gigawatts of renewable energy – equivalent of taking over 1 million cars off the road.

But also, using technology from their Deep Mind artificial intelligence subsidiary for big savings on the power consumed by its data centres.

Earlier this year, Alphabet Inc. unit put a DeepMind AI system in control of parts of its data centres to reduce power consumption by several percentage points – translating into a 15% improvement in power usage efficiency.

While developing nations believe they hold the potential to leapfrog fossil fuel electrification and go straight into 100% clean, reliable electricity for the 17% of the global population who still do not have access to electricity

For example: No one living in the town of Mole-Saint-Nicolas, Haiti, had electricity a year ago. By the spring of 2016, the town had a brand new grid, and it will soon run completely on solar and wind energy. In six months, the entire electric grid of a town of 5,000 people was built from scratch. By the end of 2018, they hope to reach a million people.

Across the world, Energy 2.0 is well underway thanks to the power of technology and digital innovation. Whether it be Google, Tesla Energy, or new challenger startups like Bulb, we are on the cusp of an energy revolution that hopes to not only achieve vast market penetration of new viable energy technologies, but the unprecedented fusion of digital and the physical allows people and the future of our world to be put first. 

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