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For utilities, energy services may offer the potential for added revenue streams, provided they target the right market segments with the right offerings. While utilities have to remain vigilant of new entrants to the market, partnerships and strategic alliances with third party intermediaries may allow utilities offering an augmented service without major involvement. This could aid retention. First-hand accounts of customers' demand for energy services, including quantitative summaries and verbatim responses providing detailed insight. Analysis is segmented by industry vertical, company size, and fuel type. The energy industry is undergoing large-scale change. As a result, demand for information and advice on how to deal with and implement solutions to these challenges is growing. Energy services therefore entail an increasing amount of risk management and advice on technological solutions. The biggest differences in demand for energy services exist between major energy users (those that spend more than pounds 50,000 per fuel type per year) and SMEs. There are also variations between different industry verticals, by fuel type, and in terms of the outlook for energy services demand in the near future. While gas customers are mainly interested in energy management services that provide them with market information and tools to manage price volatility, power customers are more interested in technical solutions and guidance to improve energy and carbon efficiency, to reduce costs, to achieve legislative compliance, and to improve levels of CSR. Which (new) pieces of legislation are likely to affect the market for energy services in the UK? What are B2B energy buyers currently doing to improve energy effiency? How is this likely to change in the next three years? What types of energy services are customers looking for? What are the major differences between B2B energy consumers with respect to expectations of energy services? What types of energy services are utilities already offering to the B2B energy market?
Demand for energy services is driven by increasing regulation and legislation
Major energy users and SMEs demand different types of energy services
Some utilities have already begun offering very comprehensive levels of energy services
Affordability is a key differentiator of energy services among customers
GOVERNMENT AND OFGEM INITIATIVES SUPPORTING ENERGY EFFICIENCY
Utilities are having to search for new income streams beyond energy supply
Government and the regulator are increasingly improving conditions for energy services
CRC Energy Efficiency Scheme
Climate Change Levy
Climate change agreements
Voluntary Business Energy Efficiency Agreements
Renewable Heat Incentive
European Commission Energy Efficiency Directive 2011
What do business energy customers actually need?
Expectations with regards to energy services vary between power and gas customers
There is strong interest from MEU power customers in energy efficiency solutions
SME power customers currently only show limited demand for energy services
MEU customers mostly require energy service offers that relate to customer satisfaction
Metering and billing
For SME customers, energy services mainly mean lower energy prices
Metering and billing
UTILITIES' CURRENT OFFERINGS
Suppliers already offer a range of energy services
British Gas Business
Scottish and Southern Energy
TOTAL Gas and Power
Shell Gas Direct
Energy service offerings vary in their range and degree of involvement
Energy services for SMEs are slightly different and more aligned with those for residential customers
CONCLUSION AND RECOMMENDATIONS
The political and business environment for utilities is constantly changing
Utilities should carefully monitor the changing regulatory framework for emerging energy service opportunities and threats from new industry entrants
Customers require different energy services depending on their companies' characteristics
Utilities must segment their customer base to identify and offer the right energy services
Carbon management and energy efficiency solutions are predominantly driven by aims to reduce costs…
…but legislative compliance and corporate social responsibility are also important
With their bigger balance sheets, major energy users are the prime target for energy services
The greatest market opportunities are likely to be among public and primary sector MEU customers
MEUs require improved levels of customer service in areas such as billing and account management
SMEs are predominantly looking for better value for money from their contracts
Given the current tough economic climate, SMEs only need low or no-cost energy services
SMEs are looking for better value for money without having to spend more on extra services
Ask the analyst
Table: Renewable Heat Incentive feed-in tariff overview
Table: What other activities are you or your company currently engaged in or planning to engage in in three years' time?
Figure: For those B2B customers that use a broker or consultant, do they do so because the broker or consultant offers energy management services?
Figure: With regards to reducing carbon footprint or increasing energy efficiency, on a scale of 0 to 10 please rate how important the following are to your business, where 10 is extremely important to you and 0 is not important at all
Figure: MEU power: have you or your company engaged in advice, monitoring, planning, buying, or implementing any energy efficiency or carbon reduction measures and technology?
Figure: MEU power: if the answer is "no," is this something you or your company are likely to engage in within the next three years?
Figure: MEU power: if the answer is "yes," which of the following energy efficiency measures does your company currently undertake?
Figure: MEU power: if the answer is "yes," in the next three years what activities do you and your business anticipate engaging in?
Figure: SME power: have you or your company engaged in advice, monitoring, planning, buying, or implementing any energy efficiency or carbon reduction measures and technology?
Figure: SME power: if the answer is "no," is this something you or your company is likely to engage in within the next three years?
Figure: SME power: if the answer is "yes," which of the following energy efficiency measures does your company currently undertake?
Figure: SME power: if the answer is "yes," in the next three years what activities do you and your business anticipate engaging in?
Figure: MEU power: are there any services that you would like your energy supplier to offer you?
Figure: SME power: are there any services that you would like your energy supplier to offer you?
Figure: Core services, SME market
Figure: Extended services, SME market
EDF Energy plc, Hutchison 3G UK Limited, Royal Dutch Shell plc, RWE npower, Telefonica, S.A., Uralsvyazinform OJSC
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