Consumer experience and expectations Infrastructure Partnerships Australia- Infrastructure Australia Energy Symposium 3 May 2018 Rosemary Sinclair Chief Executive Officer
What I ll cover 1. Australian households and energy the last ten years 2. Action and reaction the policy and regulatory response 3. Glimpses of the individualised, optimised energy future 4. Summing up 2
1. Australian households and energy the last ten years
A (general) affordability crisis 4
Electricity trailing other services on VFM including the banks Source: Energy Consumer Sentiment Survey, November 2017 80 70 60 50 40 30 20 10 0 34 47 19 Value for money for key services (NSW) 51 65 72 63 73 75 35 30 24 21 21 22 14 11 7 7 6 3 Electricity Gas Internet Mobile Phone Positive (7-10) Neutral (4-6) Negative (0-3) Insurance Banking Water 5
The price-service disconnect and low consumer confidence Source: Energy Consumer Sentiment Survey, November 2017 60 50 40 30 20 10 0 Confidence the energy market is working for me 51 4039 43 46 44 42 43 37 35 36 37 39 42 39 30 28 21 20 19 20 19 20 11 NSW VIC QLD WA SA TAS ACT SE QLD Positive (7-10) Neutral (4-6) Negative (0-3) 6
Making decisions about my energy Source: Energy Consumer Sentiment Survey, November 2017 60 50 40 30 20 10 0 57 32 11 Personal ability to make choices about energy products and services Confidence in information and tools 45 43 36 19 Enough easily understood information is available 43 15 Tools and assistance you need to manage energy use Positive (7-10) Neutral (4-6) Negative (0-3) 56 35 8 Ability to get problem resolved 7
2. Action and reaction
Affordability: no silver bullet. 9
Abolishing LMR from the Federal Court to deliberative, aligned outcomes 10
New wholesale markets from opaque contracting to access and transparent pricing 11
Re-setting retail: from pass-through to outcomes Now, with the retailers, we know that millions of Australian families are paying more than they need for their electricity. They are on plans that have run out, discounted plans that have run out and they are now on a standard offer and paying too much for their electricity. They have got people that are on the wrong plans. Prime Minister, 9 August 2017 12
The National Energy Guarantee: the end of uncertainty? 13
3. Glimpses of an individualised, optimised future
Manage my costs and give me control solar ECA Solar and Battery Research (May 2016) How much have the following factors contributed to your decision to install a solar electricity system? Reducing household energy bills 0 10 20 30 40 50 60 70 80 90 100 60 24 8 Becoming less dependent on mains electricity 32 30 20 Being able to get a feed-in-tariff for feeding 34 28 18 Government grant schemes for installing 27 27 20 Protecting the environment 26 24 22 Adding to the house's resale value 17 22 27 Recommendation by a friend or family 6 11 16 The fact that your neighbours had it 3 5 10 Strongly agree Mostly agree Mildly agree 15
Manage my costs and give me control batteries 80 70 Factors contributing to you considering installing battery storage 60 50 40 30 20 10 0 ECA Solar and Battery Research (May 2016) 14 11 11 21 19 22 41 43 39 Becoming less dependent on mains electricity Reducing household electricity costs More efficient use of my solar panels 14 14 29 Don't get a high enough feed-in tariff 15 15 25 Protectng the environment 17 18 18 Adding to the houses's resale value 16 12 11 Being an early adopter of new technology 11 13 7 Recommendation by a friend or family member 11 8 6 The fact that your neighbours had it Strongly agree Mostly agree Mildly agree 16
I want to trade, share, gift I would prefer my six cents of power, sorry my units of power, which aren t six cents, to go into my community. I get six cents from [energy retailer], but if I get 25 cents because I gave it to you because you have fallen on hard times, well I m delighted. Attendee, ECA Regional Listening Tour April-June 2016
Finkel Blueprint: from coordinating and rewarding a SMALL number of BIG things to a BIG number of SMALL things 19
Consumers as Pariahs Pawns Partners 20
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Connecting the tech with the consumer 22
Data banking first, energy next. 23
A new conversation about energy efficiency 24
4. Summing up
Five take-aways 1. Fee for no service the consumer just pays 2. Behavioural insights penalties and rewards 3. Smaller things and faster risk management 4. Digital and data making the impossible possible 5. From assets to services 26