Reshaping the Energy Sector

Achieving net zero emissions is a cross-sector endeavour that requires a systemic approach to empower consumers.

The policy intent for a net zero transition has recently been made clearer with the release of the Energy White Paper, but what are the expectations on industry actors and how achievable are the targets and commitments that have been outlined?

Now that we’ve had time to digest and discuss the details, it’s clear that the scale of change required is enormous and despite optimistic cleantech advancements, a multitude of challenges prevail.

There has been a call for a new independent body to be established to drive the energy transition. This undoubtedly has the hope of delivering more policy certainty for the next 10+ years. Consideration must be made about integration or evolution of the existing system, the needs of current and emerging market actors, supply chain requirements, and the financial instruments to underpin the energy transition.

Customer first

In the current narrative, challenges are often siloed into sector-specific strategies. Industry representatives can naturally apply their respective bias and expectations as a result of their experiences, which play into this; but there is a distinct lack of customer-centric design in these considerations. For example, do consumers want to be more engaged through smart products, or do they want affordable, reliable services that simplify their lives?

Let us consider the most disruptive element in our pathway to net zero – the decarbonisation of heat. There is a requirement for the significant improvement in the energy efficiency of buildings and homes, and the installation of low carbon heating solutions. One contradictory issue here is that the return on investment associated with installing heat pumps is often compared to current gas systems. How does a customer begin to understand this decision and gain confidence in their action to support decarbonisation?

Systemic approach

Consumers represent an integral part of the energy transition. If citizens and businesses were empowered to support the interventions required for a net zero transition, and actively engage in their own energy management, a greater number of actors would benefit from the resulting increase in sectoral integration. It is key to ensure that the future market is proactive and adaptable to the changing needs and expectations of consumers.

Policy certainty will help to incentivise sustained investment in the energy market but achieving net zero emissions is a cross-sector endeavour that requires a systemic approach and collaboration between sectors to avoid unintended impacts.

618 Insight brings a systems thinking perspective to enhance our clients’ business operating models. We work with organisations to optimise third-party relationships and deliver strategy-driven benefits for customer satisfaction.

 

How can we ensure that customer experience is at the core of the energy transition?

 

Where can we bring sectors together to recognise joint opportunities to achieve the UK’s net zero ambitions?