Under pressure to cut bills, utility companies diversify to safeguard profits
Enter the home of the future.
As well as solar panels on the roof and a heat pump providing hot water, an electric car is in the drive, plugged into a charging point. When the battery is full, an app suggests you discharge some of the electricity to use in the house when you need it most.
The app also detects that your heating is too high and asks if you want it turned down; and points out your boiler is inefficient and offers to arrange an engineer. This is the vision of Engie, the French utility company that believes energy providers will switch from passively supplying electricity and gas to actively managing customers’ homes.
At a time when UK policymakers are seeking to clamp down on what they describe as “rip off” energy bills and homeowners are interested in generating their own electricity through solar panels, utility groups are having to diversify to safeguard their profits. Wilfrid Petrie, head of Engie’s business in the UK, likens the transformation to the telecoms industry. “The value is less on the landline itself but how to use it as best as possible,” he said at a recent launch of the company’s household energy service in the UK. In other words, energy companies are starting to go down the same route as telecoms groups, which bundle together a range of services such as broadband and pay-TV with the basic provision of a landline.
Core energy supply is expected to become a low margin activity but value will be added through ancillary services. Centrica, the UK-listed owner of British Gas, has long had a sizeable services business that offers products such as boiler repair. In the past few years it has been developing other services around the idea of a “connected home”, where digital devices such as smart thermostats help households better manage their energy usage.
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