Support customers by lowering costs with the help of generative AI
Utilities organizations have a duty to keep costs low for customers, but this has been challenging in recent years, due to a number of developments:
- Extreme weather means increased prices—as in Germany, where ratepayers paid an average of 38 percent for power in the winter of 2023—so prices will likely remain elevated in 2024
- As consumers continue to use more devices, they can expect to pay more to utilities companies; e.g., fully charging an electric vehicle in the U.K. adds £23 onto a customer’s bill but saves £41 at the fuel pump
- Governments and regulators are questioning whether the traditional power merit order utilizing pay-as-you clear models (which establish the order in which each energy source is deployed) is truly working to keep costs down and ensure customers benefit from renewables’ significantly lower production cost vis-à-vis gas as the marginal producer
What can utilities do to support customers and further lower their cost burden as they increasingly utilize the grid? Artificial intelligence (AI) can help organizations keep rates down by optimizing energy distribution and consumption.
AI can analyze data from smart meters, sensors and other sources to identify patterns and trends in energy usage. This analysis can be used to predict energy demand and optimize the distribution of energy to reduce waste and minimize costs. In addition, AI can help utilities companies predict when energy consumption will be particularly high—such as during peak hours—and implement strategies to reduce usage during these times. This can involve:
- Targeted outreach and messaging to customers to incentivize energy reduction at peak times
- Automated systems that adjust energy usage based on demand
Generative AI holds promise as a new tool for utilities to improve employee productivity and communicate effectively with customers to help them change their usage behavior. By introducing new ways to unlock value for customers with the help of AI, utilities organizations can further make the clean energy transition affordable for the people they serve.
Adopt a customer mindset
Buoyed by decarbonization initiatives, utilities customers around the world increasingly adopt low-carbon technology, such as solar panels, heat pumps and electric vehicles. The U.K., for example, plans to phase out the sale of new gas- and diesel-fueled automobiles by 2030.
Consequently, transmission and distribution companies will sit at the frontlines of the move toward net zero and manage a significant growth in connection requests in the coming years. How can they prepare?
In order to support an increased number of connection requests, organizations need to become customer-centric. They should think of ratepayers as customers who expect a sophisticated level of engagement with organizations. Companies should also reinvent customer-facing journeys with the help of apps, self-service portals and easily navigable websites that meet customers’ needs.