Reinvent utility offers for households to reduce energy consumption

Energy savings : from “side project” to national priority

The Innovation Strategy team of this major European energy provider started to work on breakthrough offers for energy savings in the last two years, even though this topic wasn’t a business priority. 

The business model of this energy provider is a classic one: their revenue is proportional to the price times the volume of energy consumed. For the last 10 years, there wasn’t much business incentive for them to differentiate towards offers that induce consumers to consume less. 

That was the case until Russia's war against Ukraine, with which energy savings became one of the nation’s critical concerns. 

At that time, the Innovation Strategy team had been accumulating significant knowledge around this subject in their “side” project and was willing to dig deeper and find compelling levers to face population’s needs in the upcoming winter, and years.

A major challenge: making reduced energy consumption attractive to consumers

Stim worked with this client on an exploration of an alternative prosumer business model in 2022. They trust our capacity to tackle complex innovation problems and find it relevant to deal with this radical energy-saving offer.

At the same time, Stim also wished to work on this topic, as energy consumption reduction is one of the most effective levers for energy savings, before energy efficiency and other technological solutions.

For example, messages from the government last winter calling for consumers to pay attention to energy consumption (i.e lower the heater’s temperature, turning off unused devices etc.) helped save up 10% of total national consumption. 

In the context of energy scarcity and more extreme weather conditions, energy offers that induce consumers to consume less can contribute to the national energy security strategy in the long run.

The challenge now lay in finding a new offer that would make reduced consumption desirable for consumers and a viable alternative business model for the company.

New business models for energy providers

To design these new offers, we began by building the identity of our current object: the supply of energy to households, by meeting a multitude of experts. For all existing offers, we have detailed the characteristics of supply contracts and the associated processes

Next, we zoomed in on each of these characteristics and started generation of alternatives in a systematic way : by asking questions that challenged the status quo. This has helped us to come up with several transforming solutions within our C-K map, including: 

• What if energy metering was no longer done at household level?

• What if billing wasn't just linked to domestic consumption? 

• What if continuous access to energy didn't cover all needs?

This deep dive into the unchallenged standards of the industry has revealed interesting alternatives, with which an energy provider can maintain or increase revenues, while reducing the amount of energy produced. We gathered the high-potential alternatives into playgrounds to explore and then came up with several disruptive solutions. 

However, there are still many regulatory and technological challenges to overcome in order to make these concepts a reality. Yet the team is highly determined to explore their potential and the main energy supply BU of the company has prioritised one of our solutions to explore this winter !